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NZD/USD – New Zealand dollar continues downturn despite strong manufacturing report

The New Zealand dollar continues to lose ground. In North American trade, NZD/USD is trading at 0.6579, down 0.42% on the day. The kiwi has reversed directions this week, having declined 1.3%. On the release front, New Zealand Manufacturing Sales rebounded in Q1, posting a gain of 1.0%. The indicator had contracted 0.5% in Q4 of 2018. Later in the day, New Zealand releases visitor arrivals. In the U.S., the forecasts for producer price index reports were on the money. PPI dipped 0.1%, down from 0.2% a month earlier. Core PPI edged up 0.2%, up from 0.1% in the previous release. On Wednesday, the U.S. releases consumer inflation reports.

The U.S. dollar was broadly lower last week, and the New Zealand dollar took full advantage, climbing 1.97% last week. This was its strongest weekly gain since mid-November. There were two main reasons why investors moved away from the greenback. First, comments from Federal Reserve president Jerome Powell have set the stage for a rate cut in the coming months. Since raising rates in December, the Fed has been neutral with regard to the direction of the next rate move, but rising trade tensions have raised fears of a slowdown in the U.S. economy. This has prompted the Fed to reconsider a rate cut later this year. The CME Group has projected a 64% likelihood of a 0.25% rate cut, up sharply from a month ago, when the odds of a cut were just 16%. Secondly, there was dismal news on the employment front. Nonfarm payrolls posted its second dismal reading in four months. In May, the economy created only 75 thousand jobs, down from 263 thousand a month earlier. Wage growth was unchanged at 0.2%, shy of the estimate of 0.3%. Still, the U.S. economy remains in good shape, and the greenback has recovered over half of last week’s losses.

Green Across the Board as Trade Optimism Brews and Trump attacks Fed [1]

GBP/USD – Buoyed by UK jobs data [2]

NZD/USD Fundamentals

Monday (June 10)

Tuesday (June 11)

*All release times are DST

*Key events are in bold

NZD/USD for Tuesday, June 11, 2019

NZD/USD June 11 at 10:50 DST

Open: 0.6608 Low: 0.6611 High: 0.6569 Close: 0.6579

NZD/USD Technical

S3 S2 S1 R1 R2 R3
0.6348 0.6424 0.6539 0.6607 06699 0.7055

NZD/USD posted slighted losses in the Asian and European trade. The pair is flat in the North American session.

Further levels in both directions:

This article 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 Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher [6]

Currency Analyst at Market Pulse [7]
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.