NZD/USD Rebounds On Weak US Retail Sales

The Kiwi finished Tuesday trading up 0.20% at 0.6144, rebounding from an initial decline and stabilizing above the 0.6100 mark after the release of weaker-than-expected US Retail Sales data. The NZD/USD saw recovery as the US Dollar softened, driven by consumer spending data that indicated a slowdown in the US economy, impacting inflation and interest rate expectations.

• The NZD/USD opened Tuesday trading at 0.6110, initially dropping to an intraday low of 0.6095, before paring most of those losses and closing at 0.6144. The pair’s movement was influenced by lower-than-expected US Retail Sales data and revisions, which increased expectations of future US interest rate cuts, providing a lift to NZD/USD.
• Key levels to watch: Immediate support is at the 0.6100 (round number support), with deeper support at the convergence of the 100-day and 200-day SMAs around 0.6080. On the upside, a break of 0.6200 area would open a retest of cycle highs of 0.6220.
• Earlier, the New Zealand services sector data showed a slump in May, hitting the lowest level since August 2021, and GDP data indicated a recession with two consecutive quarters of negative growth.
• The average price for whole milk powder fell to $3,394 from $3,478 at the previous auction, according to the GlobalDairyTrade website. GDT's weighted average price for all milk products was $3,893 a ton, with the GDT price index change showing a decrease of 0.5%.
• The US-NZ 2Y swap rate 4bps lower at -32bps
• Option expiries: Upcoming notable strikes include 0.6070 (NZD500m June 19), 0.6080 (NZD462.4m June 20), 0.6100 (NZD320m June 20).
• Upcoming data: 1Q Current Account GDP Ratio at 8:45 am AEST and Non-Resident Bond Holdings for May at 1:00 pm AEST.