The New Zealand dollar follows the Australian dollar and other emerging market currencies and drops below 78 – the lowest levels since June 2012. This weakness could impact the rate decision and make the central bank more comfortable.
NZD/USD is currently trading at 0.7789 after having already fallen to .07776. It broke below the previous weekly low of 0.7820 and below the bottom of July 2012.
Update: NZD/USD recovers from the lows, rising from the long term uptrend resistance.
During Q2 2012, the kiwi was emerging from even lower levels. The really critical line is 0.7450. Before attacking this low of May-June 2012, the 0.7650 line provides lots of support. Resistance is just above 0.79, at 0.7920, followed by the very round 0.80 figure.
The Overseas Trade Index for Q1 was upbeat, showing a rise of 4.1% instead of 1.4% expected. Now the terms are even better. The ANZ Business Confidence is also on the rise, from 32.3 to 41.8 points in the recent reading.
The RBNZ recently admitted that it has been busy intervening to weaken the currency. The central bank is probably delighted with this specific fall, which doesn’t look like its work, but rather general market moves. The RBNZ will make its rate decision on Wednesday, June 12th. No change is expected.
More data due: the REINZ HPI, the Business NZ Manufacturing Index on Thursday, 22:30 GMT (prior 54.5 points), FPI on Thursday 22:45 GMT (prior +0.2%),
In the following week, the central event is the release of GDP, on June 19th, 22:45 GMT. The result for Q4 was a rise of 1.5%. A smaller rise is likely for Q1 2013. Also note the Visitor Arrivals and Credit Card Spending figures in the next week.
4hr Chart
Daily: Bearish
4hrs : Bearish
1hrly : Bearish
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