NZD Underperforms Commodity Bloc, Business Confidence Plunges

NZD/USD was supported post the Asia close, but couldn't hold onto gains. After touching a high just above 0.6250, we settled back to the low 0.6200 region (last tracking 0.6208).

• NZD saw some underperformance versus the rest of the commodity bloc, particularly NOK and AUD, although has still pushed higher against the safe havens over the past 24 hours.
• The NZIER Q2 business survey highlighted that business confidence has dropped to a 2yr low. 62% of businesses surveyed expect the economy to deteriorate versus a revised 34% in Q1. This is the lowest reading since Q1 of 2020, which was when the country went into lockdown during the pandemic. Recall that Q1 GDP in NZ fell by 0.2% in QoQ terms.
• The NZIER survey also noted that a net 76% of firms raised prices in Q2, with the same number of businesses expected to raise prices in Q3.
• Later on, ANZ commodity prices print for June (last -2.8%), followed by house prices for the same month (last 15.3% YoY).
• Also be mindful of RBA risks spilling over into NZD.