The New Zealand dollar has been under pressure as its correlation to the AUD and concerns over the Chinese economic outlook serve to sour sentiment. That has led the NZDUSD into a nine-month low, as recent risk-off sentiment further dented confidence around a currency that is typically perceived as pro-cyclical.
Last week saw the RBNZ hold rates steady as expected, marking two consecutive such decisions. The bank continues to see current policy as being restrictive for the economy, with the current cash rate of 5.5% well above their Australian neighbours (4.10%). They similarly remain data dependent, and thus it will be important to track the trajectory of the economy and inflationary environment.
Retail sales data due this week should provide an insight into quite how much the current interest rate environment is restricting spending power, with another quarterly decline expected. A weak reading for retail sales could put pressure on NZD given the potential impact it could have upon demand and thus inflation.
Looking at the chart, price stands on the cusp of a fresh nine-month low, with a break below 0.59038 required to bring a fresh bearish signal. Whether we do see a short-term rebound or not this week, the bearish trend remains in play as long as price stays below the 0.5964 swing-high.
Last week saw the RBNZ hold rates steady as expected, marking two consecutive such decisions. The bank continues to see current policy as being restrictive for the economy, with the current cash rate of 5.5% well above their Australian neighbours (4.10%). They similarly remain data dependent, and thus it will be important to track the trajectory of the economy and inflationary environment.
Retail sales data due this week should provide an insight into quite how much the current interest rate environment is restricting spending power, with another quarterly decline expected. A weak reading for retail sales could put pressure on NZD given the potential impact it could have upon demand and thus inflation.
Looking at the chart, price stands on the cusp of a fresh nine-month low, with a break below 0.59038 required to bring a fresh bearish signal. Whether we do see a short-term rebound or not this week, the bearish trend remains in play as long as price stays below the 0.5964 swing-high.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.