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New Zealand dollar risks a pullback as data outlook softens

Commerzbank says the kiwi has bounced about 2 cents after the latest rate hike, but weaker June retail sales and subdued consumer sentiment could push rate expectations lower by year end.

Reported · Written up by our desk · Major Pairs

Commerzbank strategist Volkmar Baur said the New Zealand dollar has recovered about 2 cents since the latest rate hike, but the currency remains vulnerable if the macro outlook deteriorates.

He pointed to weaker June retail sales and still-subdued consumer sentiment as drivers of a more pessimistic economic view, adding that the market is effectively pricing nearly one additional hike by year end.

Baur said the kiwi could suffer if expectations are revised lower, since the current pricing depends on a firmer policy path.

The note was issued alongside broader FX commentary, including EUR/USD holding above 1.1450 and GBP/USD slipping after mixed UK data.

Latest closeEUR/USD 1.147 ▲0.8%|GBP/USD 1.354 ▲1.4%

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