NZD: NZD/USD - Fails At 0.6000, With Risk Souring Attention Could Turn Lower
The NZD had a range Friday night of 0.5964 - 0.6009, Asia is trading around 0.5955. The NZD/USD has gapped lower this morning in reaction to the US bombing Iran Nuclear sites over the weekend. The market is short USD’s and will now be focusing on how long the US plans to be involved and if the conflict will become extended.
- (Bloomberg) - “New Zealand’s dollar is particularly vulnerable in the event of a haven rally in the US currency should the conflict between Iran and Israel pose constraints on oil supply, according to Bank of America Corp.”
- “Among Group-of-10 commodity currencies, the Kiwi “is the only energy importer and most vulnerable if Middle East oil supply is impacted more severely,” wrote Bank of America. “Being a large oil importer, the Asia region remains most vulnerable to such a shock,” the BofA team notes.”
- The NZD could not get back above 0.6000 on Friday and this morning has seen another wave of selling as the market digests the weekend's news and the implications of what further US involvement might imply.
- Technically while the support around 0.5850 holds in NZD/USD it is still in an uptrend but should risk start to come under more significant pressure the market is likely to test this.
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.5830(NZD300m June 23). Upcoming Close Strikes : 0.5690(NZD621m June 25)
- CFTC Data showed Asset managers paring back their shorts slightly once more over the week, the leverage community did likewise.
- Data/Event : GDP
Fig 1: NZD/USD Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
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