BRAZIL: BCB’s David Reiterates Prospect For Long Rate Pause

• Alongside the Norwegian Krone, the New Zealand dollar is the best performing currency in G10 Monday, led higher by the broad pessimistic sentiment for the dollar and the relatively stable reaction in equity markets to geopolitical and tariff developments over the weekend.
• The 1.15% rise during today’s session has prompted NZDUSD to return to an important zone of resistance between 0.6025/40. A close at current levels would be the highest since the US election, signalling scope for a more protracted recovery towards 0.6168, the 76.4% retracement of the Sep ’24 – Apr ’25 selloff. AUDNZD has registered a one-month low at 1.0758, and further NZD outperformance will place attention on the year’s lows at 1.0652.
• The hawkish slant from the RBNZ last week has only seen a slight paring back of short positions. As a reminder, while the bank cut rates by 25bps to 3.25% as expected, the board suggested that the base rate is near the 'neutral' zone, which may limit the space for further rate cuts ahead. CFTC Data showed asset managers maintaining their shorts, while the leveraged community pared back only a small portion of the decent short they had initiated the week before.
• NZ terms of trade data will cross during Tuesday’s APAC session, however, the economic calendar remains light for the rest of the week. This will likely leave Kiwi susceptible to the broader risk tone and associated greenback trajectory.

• EUR/USD: Jun04 $1.1400-05(E1.0bln); Jun05 $1.1050(E5.9bln), $1.1300(E2.3bln), $1.1400(E2.2bln), $1.1415-25(E1.5bln), $1.1500(E1.5bln); Jun06 $1.1500(E1.0bln)
• USD/JPY: Jun05 Y142.00($1.1bln), Y143.00-05($1.1bln)
• AUD/USD: Jun04 $0.6435-55(A$1.5bln);
• USD/CAD: Jun04 C$1.3735-50($1.2bln)

MNI interviews ex-CEA senior economist and former CBO director Douglas Holtz-Eakin. On MNI Policy MainWire now, for more details please contact sales@marketnews.com