- Dollar weakness triggers more gains in NZD/USD, approaching 0.6700.
- Kiwi among top performers on Friday and also over the week.
The NZD/USD pair rose further during the New York session on the back of broad-based US Dollar weakness. It climbed to 0.6680, reaching the highest level since April 30. From the top pulled back modestly and as of writing trades at 0.6660/65, up 135 pips for the week.
The kiwi rose modestly after the release of NZ data that came in above expectations. Total construction jumped 6.2% q/q. “Stronger than expected result signals upside risk to our forecast for Q1 GDP growth. We’re currently forecasting a 0.5% gain in GDP and will be reviewing that forecast over the next few days as the March quarter activity indicators are released,” said Satish Ranchhod, Senior Economist at Westpac.
After moving sideways around 0.6620 for hours broke to the upside following the NFP. The May employment report came in significantly below expectations as it shows the US added just 75K (against 185K) and the prior two months were revised lower by 75K. The data contributed to increasing expectations about a rate cut from the Federal Reserve, boosting US bonds and equity prices in Wall Street.
The pair initially rose to the 0.6650 area and after a brief pullback, resume the upside, breaking previous highs. The rally was capped so far by the 20-week moving average at 0.6680/85 but the kiwi held to most gains, having the best weekly performance since February.
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