Various USD indices recovered by 0.8-0.9% by the close of the week; NZD was modestly higher on most of the crosses; EUR was the weakest, closing near 1.2400 USD

By Jason Wong

Last week ended on a fairly uneventful note, with modest changes for NZD crosses. In Friday’s overnight trading session, the USD staged a broadly-based recovery, US 10-year Treasury yields nudged lower, while US equities were flat. 

The S&P500 traded higher for most of the session, up 0.8% at one stage, before retreating in the last few hours to close barely higher, although the score-keeper will show a sixth consecutive daily increase and a strong 4.3% weekly increase.

During Friday’s NZ trading session, the USD remained under pressure for no particular reason other than it’s been a prevalent theme this year.  This selling pressure evaporated soon after the NZ close, seeing the various USD indices recover by 0.8-0.9% by the close of the week, NY time, perhaps a reflection of short-term covering ahead of the US long-weekend.  The NZD got close to, but failed to breach, the 0.7440 level of technical resistance before peeling off to close the week around 0.7390.

The NZD was modestly higher on most of the crosses.  NZD/AUD continued to drift higher, closing the week just under 0.9350.  Of the majors, EUR was the weakest, closing near 1.24 and NZD/EUR up to its highest level this month, up through 0.5955.  For the UK, in a speech, the EU’s Chief Brexit negotiator Barnier noted that talks were pointing to an orderly Brexit but he also argued how the British government’s positions on trade, customs and regulatory independence “close the door” on any prospect of a preferential relationship with the EU after Brexit.  GBP’s move for the session was almost entirely USD-driven, seeing GBP close down 0.5% to 1.4025.

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