Kiwi Slips On Recession Fears

NZD/USD ground lower on Wednesday as recession fears created demand for safe haven currencies, allowing the greenback to pace gains.

• The Antipodeans outperformed EU FX but lagged all of the other G10 currencies. The dollar index (BBDXY) rose past 1,280 to its best levels in more than two years.
• The inversion in U.S. 2-/10-Year Tsy curve deepened on Wednesday, fuelling concerns about an economic downturn. Although the VIX index fell and U.S. equity benchmarks eked out some gains come the closing bell, Bloomberg Commodity Index plunged to a five-month low.
• NZD/USD last deals at $0.6153, up 5 pips on the day. Renewed losses past Jul 5 low of $0.6125 would prompt bears to target May 22, 2020 low of $0.6081 and the psychologically significant barrier at $0.6000. Bulls need gains past Jul 4 high of $0.7252 before setting their sights on $0.6327, which capped gains on Jun 24 & 27.
• There is little in the way of notable data releases on the local docket during the remainder of this week.
• In the absence of local data signals today, it is worth watching Australian trade report today.