NZD Lower Against All G10, AUD/NZD Surges On Strong CPI Data

The kiwi is lower against all G10 currencies today, although ranges have remained tight against all but the AUD on the back of stronger-than-expected AU CPI. Tomorrow we have ANZ Business Confidence, before NZ break for Matariki Day on Friday.

• New Zealand's Treasury Department is examining further measures to reduce government spending and increase revenue due to a weak economy eroding tax receipts, with options including raising levies and fees and making spending cuts. Secretary Caralee McLiesh highlighted the need for tough choices to address underlying economic weaknesses and growing fiscal pressures from pension and healthcare costs.
• NZD/USD has remained rangebound for the past two weeks and trades little changed today at 0.6118 we have been stuck between 0.6100 and 0.6140. The pair trades just below the 20-day EMA, with the moving average acting at resistance at 0.6129, while support is 0.6100 (50-day EMA)
• AUD/NZD gapped higher on stronger-than-expected AU CPI at 4.00% vs 3.8% est and up from 3.6% in April, the cross hit a low of 1.0852 before surging to 1.0917 and back to May 22 levels. The AU-NZ 2yr swap is 11bps higher at -54bps and is now at the tightest levels since Sept 2022. Initial resistance is now 1.0946 (June 22 highs) with a break above here opening a move to retest 1.1000, initial support is 1.0850 (intraday lows/50-day EMA)
• NZD/JPY has been rangebound this week and trades at 97.70. The yen has been stable the past few days as traders grow concerned the BoJ will intervene in the market. The cross has failed multiple times this week to break above initial resistance at 98.00 (psychological/round number), while support remains at 96.78 (20-day EMA)