Forex Daily Recap – Kiwi Pair Slipped 0.61% Following Risk-Revealing RBNZ Statements

NZD/USD

After maintaining a range bound performance until yesterday, the Kiwi pair slipped off the cliff in the morning hours. The sudden plunge in the pair came up following risk revealing RBNZ statement. The Bank mentioned that the escalating US-Sino trade tensions could have a significant impact on the Global economy. In case of an economic slowdown, New Zealand might lose ground to its financial stability. On the other side of the equation, the US Dollar was conquering new heights, putting more downward pressure on the pair. As a result, the NZD/USD pair lost traction and touched the weekly low near 0.6505 levels.

EUR/USD

Fiber had a grand start on Monday from the 1.12 handle. However, a combination of adverse reports and global cues had tweaked the pair making it drop throughout the week. The EUR/USD pair initiated trading on Wednesday morning near 1.1165 levels, but the plunge rally continued. The Fiber lost almost 37 pips during the day on the backdrop of weak EUR-specific economic data and the poor German Bond yields. Traders went upset as German May Unemployment Change recorded 60K over -8K estimates.

Moreover, the Greenback remained elevated amid the optimistic US macroeconomic data. This time, the Redbook Index (Both MoM & YoY) came out higher-than-expectation, boosting the Greenback. Hence, laterwards, the robust growing US Dollar Index pushed down the EUR/USD pair onto its bottom levels.

USD/CAD

The Loonie pair touched top monthly levels near 1.3545 marks in the European session. The strong uptrend had received strength over the drastically falling Crude prices. The commodity was trading near its two months low levels, pricing at around $56.93 per barrel. The Crude prices fell over a Chinese Commentary that showed caveat to the US of losing the rare earth supply. Rare earth materials find usage in a wide range of consumer products and electronic devices. According to a US Geological Survey, the US had imported around 80% of its rare earth materials from China. Such a potent threat from the Chinese counterpart sent waves of tension in the overall market. Crude prices went down as investors focussed on the demand side of the picture. If the US-China trade dispute tends to worsen, a global economic slowdown will remain imminent, bringing down the Oil demand. However, the beneficiary out of the Crude price slump was the USD/CAD pair.

Meanwhile, BoC left the interest rates unchanged as per the market expectation.

US Dollar Index

Despite the US-Sino trade worries, the Buck seemed to overlook the unofficial Chinese threat. The US Dollar continued to rise, marking day’s high near 98.20 levels. The major credit for the Wednesday upliftment in the Greenback goes to the EUR/USD pair plunge. The Fiber constitutes around 50% of the overall USD Index. Hence, any fluctuation in either one would have an inverse impact on the other one. The Greenback benefitted the most after the release of lower-than-expected German May Unemployment figures.

Over to the event side, there was hardly any significant USD-specific event today to impact its movements. However, there remained a few low volatile US events having less influence on the Buck. MBA Mortgage Applications computed since May 24 reported -3.3% over 2.4% estimates. Redbook Index (May 24) came up with positive data while May Richmond Fed Manufacturing Index reported negative data.