- The NZD / USD is still on track to post big weekly losses.
- NZD continues to struggle to find demand.
- The US Dollar Index remains in positive territory above 93.60 on Friday.
The pair NZD / USD it extended its decline during Asian trading hours and touched its weakest level since November at 0.6805. Although the pair recovered a portion of its daily losses, it lost 0.3% on the day to 0.6822 at press time. Weekly, the NZD / USD is losing more than 200 pips.
Data from New Zealand on Friday showed that spending on credit cards rose 6.9% annually in July, up from 6.3% in June. However, this figure did not help the kiwi find demand and the sharp drop seen in the main Asian stock indices made it even more difficult for the currency to rebound.
On the other hand, the constant strength of the USD is forcing the NZD / USD to remain in negative territory. With US equity futures pointing to another weak open in major Wall Street indices, the US Dollar Index (DXY) is trading at its highest level in 2021 at 93.68, rising 0.12% on the day.
There will be no high-level macro data releases on the US economic docket on Friday and NZD / USD is likely to end the week on the wrong foot.
NZD / USD outlook
ANZ analysts think that NZD / USD will remain under bearish pressure with the Reserve Bank of New Zealand opting to wait longer to raise its policy rate.
“On the one hand, it is clear that the RBNZ needs, and probably will, go up soon and that, having been tough at first, NZ will probably crush Delta. But on the other hand, Delta is climbing rapidly (and probably at a rate that few expected) and that is very nervous, “said the analysts. “Markets are now trading 85bp up, that’s less than the 100bp we expect, but then the risks are clearly skewed to minus.”
Technical levels
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