- NZD/USD remains steady around 0.6170 despite the strengthening US dollar broadly.
- New Zealand’s Trade Balance in June decreased to $9M MoM from $52M previously (revised).
- Market participants will focus on the Federal Reserve’s (Fed) monetary policy decision later this week.
The NZD/USD pair holds ground above 0.6170 after reaching a two-week low. The pair currently trades around 0.6172, up to 0.08% on a daily basis. The downtick in the Kiwi is supported by the strengthening of the US Dollar across the board.
The latest data from Statistics New Zealand showed on Monday that New Zealand’s Trade Balance in June decreased to $9M MoM from $52M previously (revised). The annual trade deficit decreased to $15.98B for the same month from $-17.12B previously (revised from $-15.64B). Additionally, Exports for June declined to $6.31B compared to $6.97B (revised) previously, while imports fell to $6.3B from $6.91B prior.
Furthermore, the Reserve Bank of New Zealand (RBNZ) maintained the official cash rate (OCR) unchanged at 5.50% in the July meeting, which triggered further downside on the Kiwi. Also, concern about China’s economic slowdown would also keep pressure on the NZD/USD pair.
Across the pond, US Unemployment Claims fell below expectations and marked the lowest reading since mid-May. This data raised market anticipation about the possibility of future Fed tightening policy despite mixed findings from the US Retail Sales figure.
In the absence of top-tier data releases from New Zealand, this week’s key focus will be the Federal Reserve’s (Fed) monetary policy decision on Wednesday. The Fed is expected to raise 25 basis points (bps). Market participants will also closely watch Fed Chairman Jerome Powell’s press conference for fresh impetus. These events could significantly impact the US Dollar’s dynamic and give the NZD/USD pair a clear direction.