fxmatters

The stalemate continues. The general expectation is for global and local growth ahead but there is also awareness of the risks that abound. Some of these risks come into focus this week: US corporate earnings stream through from now for the June quarter; and June quarter Chinese GDP will also be reported. Growth in both areas has slowed, but by how much is yet to be revealed. Markets appear to be anticipating the worst at present. This sentiment – and the risk of confirmation – signals that a sharp NZD fall could occur at any stage. However the more likely scenario is that range trading persists. Picking the shifts within the range is a guessing game but with local spending constrained, with the RBA now on hold and with the European banks about to reveal their balance sheet strength – or lack of – next week the short-term risks appear biased towards a lower NZD/USD as well.