The US dollar is retracing on most fronts today but the New Zealand dollar is an exception. NZD/USD remains within striking distance of a four-month low and below recent support.
Two days of heavy selling on Thursday and Friday broke through the 2024 low and it’s found little buying interest down here.
That’s a bad sign going forward for the only G10 currency that can compete with the US dollar on rate differentials.
The RBNZ cash rate is at 5.50% and the market is pricing in 73 bps in cuts this year. The housing market in New Zealand has remained resilient and it hasn’t gotten a boost from improving global risk appetite and commodity prices.
As for the chart, it’s not a pretty one. The lack of bounce today is ominous and there isn’t much support until 0.5850, though a close today above 0.6000 might encourage some more-optimistic bulls.
This article was written by Adam Button at www.forexlive.com.
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