- NZD/USD remains mildly bid despite below-forecast New Zealand business confidence data.
- New Zealand’s business outlook for June printed above estimates.
NZD/USD is seeing little action even though New Zealand’s business confidence index for June, as calculated by Australia New Zealand (ANZ) bank, printed well below estimates soon before press time.
The business confidence number fell to -38 in June, contradicting the expected improvement to -22.7 from May’s figure of -32.0. The below-forecast June reading indicates the 25 basis point rate cut by the Reserve Bank of New Zealand has failed to boost the sentiment.
Even so, NZD/USD remains mildly bid at 0.6684, possibly due to an improvement in the expected future state of the business, as represented by the ANZ activity outlook, which came in at 8%, beating the estimated growth of 7.8%. The data, however, printed well below the previous month’s print of 8.5%.
The RBNZ kept the interest rates unchanged on Wednesday and retained dovish forward guidance, as expected. The markets are fully priced for a rate cut in July.
Looking ahead, the pair looks set to test the 200-day moving average at 0.6705, having reinforced the short-term bullish outlook with a strong bounce from the 5-day moving average on Wednesday.
A sustained break above the 200-day MA, however, may remain elusive if the US GDP data, due today at 12:30 GMT, is revised higher, forcing the markets to further scale back expectations of aggressive rate cuts by the Federal Reserve.
Pivot levels
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