Talking Points:
- NZ Dollar Slumps as Markets Bet on Most Dovish RBNZ Outlook Since 2009
- Aussie Dollar Fails to Hold Gains After Comments from RBA DepGov Lowe
- US Dollar Corrects Higher After Dropping the Most in a Month Last Week
The New Zealand Dollar underperformed in overnight trade amid deteriorating RBNZ policy expectations. Priced-in bets reveal investors are leaning toward two 25 basis point rate cuts over the coming 12 months, making for the most dovish outlook since 2009.
The Australian Dollar saw a bit of a boost following remarks from RBA Deputy Governor Lowe, who hinted the central bank probably won’t cut the cash rate further in the near term.Gains proved short-lived however considering the message echoed the tone of the RBA’s latest policy statement, which have had ample time to be priced already.
The US Dollar launched a broad-based recovery, scoring gains against nearly all of the majors in a move that appeared corrective after the benchmark unit lost 1.04 percent last week, the most in a month. From here, the greenback will look to minutes from April’s FOMC meeting and April’s US CPI data (both due later this week) for direction cues.
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Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
|---|---|---|---|---|---|
| 22:30 | NZD | Performance Services Index (APR) | 56.5 | - | 57.6 |
| 23:30 | AUD | RBA’s Lowe Gives Speech in Sydney | - | - | - |
| 23:50 | JPY | Machine Orders (YoY) (MAR) | 2.6% | -6.0% | 5.9% |
| 23:50 | JPY | Machine Orders (MoM) (MAR) | 2.9% | 1.5% | -1.4% |
| 1:30 | CNY | April Property Prices | - | - | - |
| 1:30 | AUD | New Motor Vehicle Sales (MoM) (APR) | -1.5% | - | 0.7% |
| 1:30 | AUD | New Motor Vehicle Sales (YoY) (APR) | 2.8% | - | 4.6% |
| 4:00 | JPY | Tokyo Condominium Sales (YoY) (APR) | -7.6% | - | -4.0% |
| 4:30 | JPY | Tertiary Industry Index (MoM) (MAR) | -1.0% | -0.5% | 0.4% |
| 4:30 | JPY | BOJ Maeda Speaks at Panel Discussion | - | - | - |
| 4:30 | JPY | Capacity Utilization (MoM) (MAR) | -1.2% | - | -3.2% |
| 4:30 | JPY | Industrial Production (MoM) (MAR) | -0.8% | - | -0.3% |
| 4:30 | JPY | Industrial Production (MoM) (MAR) | -1.7% | - | -1.2% |
European Session
| GMT | CCY | EVENT | EXP/ACT | PREV | IMPACT |
|---|---|---|---|---|---|
| 7:00 | CHF | SNB Sight Deposits | - | - | Low |
| 7:15 | CHF | Retail Sales (YoY) (MAR) | - | -2.7% | Medium |
| 13:45 | EUR | ECB Publishes Asset-Purchase Data | - | - | High |
Critical Levels
| CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
|---|---|---|---|---|---|---|---|
| EURUSD | 1.1128 | 1.1271 | 1.1361 | 1.1414 | 1.1504 | 1.1557 | 1.1700 |
| GBPUSD | 1.5532 | 1.5639 | 1.5683 | 1.5746 | 1.5790 | 1.5853 | 1.5960 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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