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NZD/USD Falters But Kiwi Outperforms Commodity-Tied Peers

NZD

A rebound in the broader U.S. dollar strength pulled the rug from under NZD/USD Tuesday, with the pair erasing its earlier gains as a result. Weaker commodity prices helped keep a lid on the likes of the kiwi dollar.

  • The greenback served as the main driver of NZD/USD price action, which is evidenced by strong correlation with swings in the BBDXY index.
  • The rebound in the U.S. dollar was facilitated by above-forecast Conf. Board Consumer Confidence and JOLTS data, which fanned hawkish Fed bets and sent U.S. Tsy yields higher.
  • Cross-asset signals were negative for the kiwi. Equity sentiment remained weak, with the VIX index creeping higher. The commodity complex also turned softer.
  • Still, the kiwi outperformed its commodity-linked G10 peers. AUD/NZD moved away sharply from recent cyclical highs, as Australia/NZ 2-Year swap spread widened.
  • NZD/USD last deals at $0.6133. A fall through Aug 29 low/round figure of $0.6102/00 would shift focus to Jul 14 cycle low of $0.6061. Bulls look for a recovery above the 50-DMA ($0.6238) before targeting Aug 12 high of $0.6468.
  • Building permits & ANZBO survey headline the local data docket today. China's official PMI figures will also provide interest.
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