Kiwi Clings Onto Gains, Cooling In Housing Market Continues

Better commodity prices helped push NZD/USD higher on Monday, as Western leaders mulled further sanctions against Russia. This did not hurt overall sentiment, with equity markets staying buoyant.

• Spot NZD/USD last trades flat at $0.6948, with the initial layer of resistance provided by Mar 30 high/round figure of $0.6998/0.7000. A clearance of those levels would signal the resumption of a broader uptrend. Bears look for a retreat below Apr 1 low of $0.6896 towards key support from Mar 29 low of $0.6876.
• CoreLogic report showed that house prices in New Zealand slowed for a fifth consecutive month in March, confirming that the property market is retreating. According to CoreLogic, "the impact of tightening credit and increasing interest rates has reduced the pool of buyers who are willing and able to pay recent prices and this has led to a reduced number of property transactions." As a caveat, Barefoot & Thompson data released this morning showed a rebound in Auckland house prices but, truth be told, Barefoot's Managing Director stressed that "too much should not be read into one month's trading" and "overall, the rate at which prices are increasing is declining."