The New Zealand dollar is drifting on Thursday. In the North American session, NZD/USD has fallen to 0.6132 at the time of writing, down 0.41% on the day.
The New Zealand dollar continues to have its way with its US counterpart and has soared 4% since July 29.
New Zealand retail sales expected to slide
The markets are braced for a downturn in retail sales for the second quarter, with a market estimate of -1%, following a 0.5% gain in the first quarter. The New Zealand economy has been struggling and weak retail sales in June drove the Services PSI lower to 40.2 in June, compared to 42.6 in May. A reading below 50 indicates contraction. High interest rates have weighed heavily on economic activity and consumers have cut back sharply on discretionary spending.
In the US, the FOMC minutes of the July meeting reaffirmed that the Fed is headed towards a milestone rate cut at the Sept. 18 meeting. Most of the Fed officials at the meeting favored reducing rates next month, provided that that data “continued to come in about as expected”. The markets have fully priced in a September cut, which hasn’t happened since the onset of the Covid pandemic.
Markets await Powell’s Jackson Hole speech
The annual Jackson Hole symposium is often little more than a photo-op but this year promises to be different. Next month, the Federal Reserve is poised to deliver its first rate cut since March 2020, likely in the form of a quarter-point cut. There is an outside chance of a large half-point cut, which would become more likely if the next jobs report on Sept. 6 points to further cooling job growth.
.
NZD/USD Technical
- NZD/USD is testing support at 0.6147. Below, there is support at 0.6100
- The next resistance line is 0.6209
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.
Kenny Fisher
Latest posts by Kenny Fisher (see all)
- NZ dollar drifting ahead of manufacturing data - 12 September 2024
- AUD/USD edges higher as inflation expectations eases - 12 September 2024
- Euro flat ahead of ECB decision - 12 September 2024