The NZD/USD pair experienced some selling pressure for the third consecutive day on Monday. This was influenced by mixed Chinese data that did not excite buyers or give a boost to the New Zealand Dollar (NZD). On the other hand, the USD benefited from the Federal Reserve’s (Fed) hawkish stance, leading to downward pressure on the NZD/USD pair.
Starting the week, the NZD/USD pair saw a slight bearish gap but managed to stay above the 0.6100 mark during the Asian session. Prices remained low near the 0.6130-0.6125 range after the release of Chinese economic data. The National Bureau of Statistics reported that China’s Retail Sales grew by 3.7% YoY in May, beating estimates, but Fixed Asset Investment and Industrial Production figures fell short of expectations. This data did not provide much support for antipodean currencies like the NZD due to the ongoing USD strength.
The USD Index (DXY) remained strong, reaching levels not seen since early May after the Fed announced a forecast of only one rate cut in 2024. This outlook increased US Treasury bond yields and supported the USD, creating a challenging environment for the NZD/USD pair. Geopolitical tensions in the Middle East and political uncertainties in Europe also contributed to the USD’s safe-haven status, further impacting the NZD/USD pair’s performance for the third day in a row.
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In conclusion, the NZD/USD pair continues to face pressure from the USD’s strength and geopolitical factors. Investors should remain cautious and stay informed of market developments to make well-informed trading decisions.