Three months of sideways trade
The New Zealand dollar has been the star commodity currency this year. It’s shrugged off the concerns about trade that have been plaguing the Canadian and Australian dollars.
Today, the New Zealand dollar is leading G10 currencies and it briefly touched the best levels since March 14.
In the medium term, the pair is mostly going sideways but has shown a trend towards lower highs and lower lows. In the longer term, it’s consolidating following a nice Dec/Jan rally.
In terms of fundamentals, there isn’t much domestic on the calendar this week. Tomorrow there is some retail card spending data and later today is the NZIER business survey.
Neither are likely to be big market movers. Instead, it will all be about trade and global sentiment. Watch out for comments from Xi later.
The trade is going to be to wait for the smoke in the consolidation to clear. That’s going to mean a fall below 0.7150 or a rise above 0.7425.