ANZ offers a near-term outlook for the NZD/USD pair, highlighting a likely struggle to break above the 0.60 level. The bank notes that New Zealand’s Q2 retail sales fell by 1% on a quarterly basis, which poses risks to Q2 GDP and reflects the economy's mixed outlook.
Downward Q2 Retail Sales: New Zealand's Q2 retail sales have declined by 1% quarter-over-quarter, signaling downside risks for the country's Q2 GDP figures.
RBNZ's Stance: The Reserve Bank of New Zealand (RBNZ) is set on further tightening if necessary. It is even willing to risk a recession to counter inflationary pressures, thus further putting a dampener on the NZD.
Global Influences This Week: ANZ predicts that global movements will be the primary determinant for NZD this week, and the pressure for the currency to remain below 0.60 against the USD is expected to continue.
ANZ's analysis underscores a challenging environment for the NZD/USD pair in the near term. The New Zealand economy faces a mixture of recovering tourism and migration against a backdrop of declining retail sales and a hawkish RBNZ. These factors, combined with global movements, are likely to keep the NZD/USD under the 0.60 level in the immediate future.