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Better Risk Appetite Supports Kiwi

NZD

NZD/USD extended its bullish run on Monday, as better risk sentiment encouraged participants to buy high-beta FX. Positive COVID-19 news from China and firmer oil prices supported commodity-tied currencies, while a public holiday in the U.S. limited market activity.

  • NZD/USD last deals at $0.6555, little changed on the day. Yesterday's upswing brings the rate closer to testing key near-term resistance from $0.6568, the high print of May 5. A break here would expose the $0.6600 mark. Bears look for a retreat past May 24 & 25 lows of $0.6423.
  • In his presentation on the MPS, RBNZ Dep Gov Hawkesby warned that "a recession is well within the realms of possibility," while inflation data "give a clear message we need to continue removing stimulus" and raise the OCR beyond neutral "which is 2%."
  • Hawkesby will make two more presentations on the MPS later today and tomorrow.
  • Local data highlights this week include building permits & ANZ Business Confidence (today), CoreLogic House Prices (Wednesday), terms of trade (Thursday) & completed construction work (Friday).

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