The New Zealand dollar has started the week in negative territory. In the North American session, the pair is trading at 0.7048, down 0.27% on the day.
NZD/USD climbed 1.85% on the week, its best weekly showing since November 2020. The pair has climbed back above the 70-line, which has psychological significance.
New Zealand will release ANZ Business Confidence on Wednesday. The preliminary estimate for June came in at a disappointing -0.4, down from a reading of +7.0 in May. The upcoming reading is expected to confirm the initial reading. Although business confidence slipped in June, business conditions have looked solid in the first half of 2021. Employment and investment expectations are around pre-corona levels, and inflationary pressures are rising. The ANZ is projecting inflation over a year ahead at 2.3%, which is above the RBNZ’s target midpoint. With the RBNZ sounding more hawkish, the ANZ expects a rate hike in February 2022.
Consumers remain optimistic about economic conditions. Westpac Consumer Sentiment for the first quarter came up to 107.1, up from 105.2 beforehand. This was the highest level in six quarters. Stronger consumer confidence should translate into increased consumer spending, a key driver of economic growth.
Over in the US, a light data calendar this week means that the focus will be on employment releases. The highlight will be the June nonfarm employment change on Friday. The consensus stands at 690 thousand, considerably higher than the May figure of 559 thousand. Although the US economy is performing well, the high-flying estimates of one million-plus new jobs we saw earlier in the year have been toned down.
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NZD/USD Technical
- There is resistance at 0.7133, followed by 0.7197
- On the downside, the pair has support at 0.6968 and 0.6867