The New Zealand Dollar was weaker on Wednesday after the May Australia & New Zealand Banking Group (ANZ) business confidence survey and latest Reserve Bank of New Zealand (RBNZ) financial stability report served markets with a reminder of the challenges ahead for the Kiwi currency.
The Kiwi Dollar advanced against rivals early in the new week but the going could become tougher from Tuesday onward if the Reserve Bank of New Zealand (RBNZ) financial stability report augurs fresh speculation of further interest rate cuts to come, and if U.S.-China trade tensions flare up again.
From a technical outlook perspective, GBP/NZD is now in an established downtrend which started at the beginning of May. Given the old adage that the ‘trend is your friend,’ this downtrend is seen as biased to continue.
The New Zealand Dollar hit a new low Wednesday after the first-quarter retail sales report was unable to arrest the decline in the currency but, with one eye on rising milk prices, local analysts are turning bullish in their outlook for the Antipodean unit.
The New Zealand Dollar will underperform all of its G10 rivals other than the U.S. greenback in 2019, according to the latest forecasts from Morgan Stanley and J.P. Morgan, as domestic and international pressures conspire against the Kiwi unit.
The technical outlook for GBP/NZD is mixed, for whilst the exchange rate is technically still in a short-term uptrend, the spike higher which led to the establishment of the May highs, and saw the exchange rate briefly pierce the $2 mark, also looks very much like an exhaustion move, and possible reversal point.