NZD/USD Back Above 0.6100 On Soft US ISM Services Data

The NZD/USD finished the day up 0.41% at 0.6103, the move came on the back of a weaker USD as US ISM Services index data came in far weaker than expected in June at 48.8 (est. 52.7). It more than reverses the 4.4pt increase in May, leaving it at its lowest since May’20. Locally, the calendar is empty today, while the US will be out for the July 4th holiday, so expect the upcoming session to be a quiet one.

• The NZD/USD is back above 0.6100, after rallying to a high of 0.6130 overnight. The NZD/JPY is trading at 98.66 levels not seen since Sept 1986, with 100.00 now the target, the cross is up over 9% for the past year.
• Federal Reserve officials need additional signs that inflation is heading back toward their 2% target before considering any interest rate cuts, according to minutes from the central bank’s June meeting released Wednesday that showed increasing concern over signs of economic weakness.
• New Zealand house prices fell 0.5% in June, marking the third consecutive month of decline due to high interest rates, according to CoreLogic New Zealand. Despite this, prices rose 1.8% annually, though the central bank's continued restrictive monetary policy and high mortgage rates are dampening consumer confidence and lifting unemployment.
• Immediate support is seen at 0.6081 (200-day EMA) a break would open up a move to 0.6048 (July 2 lows). Resistance is at 0.6130 (Jul 3 high), a break here would open a move to 0.6148 (June 20 high) while above here the June highs at 0.6222 become the target.
• The NZ-US 2yr swap is 1bps higher at 26bps.
• Expiries: 0.6130 (NZD720.7m), Upcoming notable strikes: 0.6135 (NZD494.5m July 8), 0.6300 (NZD448m July 9), 0.6250 (NZD436.8m July 5)
• Looking ahead, New Zealand To Sell 31, 34, 40 (L), 41 Bonds at 12:35 AEST.