NZD/USD Outlook (23rd August 2019)

Overall, NZD/USD is trending downwards. Recently, NZD/USD strengthened in response to an interview with RBNZ Governor Orr by Bloomberg this morning. Governor Orr explained that since global growth is slowing and that several countries are already cutting interest rates, the recent 0.50% rate cut “reduces probability of having to do more later”. Governor Orr is also optimistic about the New Zealand economy, saying that the unemployment rate is low, and that inflation level is “near the midpoint of their band”. Thus, cutting interest rate at this time will encourage more spending and investment activities.

Also, this morning, the released New Zealand Retail Sales data were better than forecasted.

• Retail Sales q/q (Actual: 0.2, Forecast: 0.1%, Previous: 0.7%)
  
• Core Retail Sales q/q (Actual: 0.3, Forecast: 0.2%, Previous: 0.6% revised from 0.7%)
  

NZD/USD is currently testing the resistance level of 0.64000. Its next support level is at 0.62500.