Kiwi Remains Heavy

NZD/USD holds a fairly tight range. It has traded with a mild bearish bias this morning, but May 5/two-year low of $0.6393 has remained intact thus far. The rate last deals at $0.6399, down 12 pips on the day.

• Bears need a retreat towards support area at $0.6385-77, which limited losses in Jun 2020, to confirm that they are having the upper hand. A break here would bring May 29, 2020 low of $0.6169 into play. Bulls need a rebound above May 5 high of $0.6568 to get some reprieve.
• Fonterra lowered its 2021-22 milk price forecast to NZ$9.10-9.50/kg milksolids from NZ$9.30-9.90 owing to "a number of recent events which have resulted in short-term impacts on global demand for dairy products." The revision comes on the back of sharp declines in prices at the most recent GDT auction and as the current season draws to an end. Note that the mid-point of the revised price range would still be a record high.
• Focus turns to card spending (Tuesday), inflation expectations (Thursdy) & BusinessNZ M'fing PMI (Friday).