The rates continue with an extremely high volatility. In just six months the value of the NZD has varied from 0.68 up to 0.74 USD. In May the value of the NZD reached a low for 2018, but slightly deviated from the minimum level. A significant strengthening of the US dollar was based on a decrease in geopolitical risks and strong economic statistics in the US. A rapid downtrend has formed, but there is a probability that the minimum has already reached its maximum and the rates will not decrease below 0.68 USD in the near future.
This week economic statistics did not support the USD. The latest data about the labor market and real estate in the US were slightly below expected. In addition, the probability of a trade war between the US, the EU, and China has increased, which may have negative consequences for the world economy.
The New Zealand dollar has not received new growth incentives in the absence of new macroeconomic statistics. The market also reacted poorly to the change of the RBNZ management, expecting that the new head of the RBNZ is likely to continue the soft monetary policy of the predecessor.
Next week the rates will be depending on economic statistics from the US, where GDP data is expected, as well as the index of business activity in the manufacturing sector and the trade balance. In the current situation, the most optimal would be the deals on the trend, given also that the price correction is coming to the end, and after reaching and shifting the resistance line, the rates again turned in favor of the USD. At the same time, we can expect that the current downtrend will completely lose its intensity and volatility will decrease.
