The pair traded to a high of $1.1430 yesterday, its highest level since November 2013 as the global dairy trade index dropped for eight consecutive sessions. On the AUD side, we had May retail sales out today, which came out slightly worse than expected. The market was looking for a 0.5% rise in May but the reading came in at 0.3%. This took some sting out of the AUD but against the kiwi I feel the fundamentals remain in favour of the AUD.
The decline in global daily trade prices is likely to mount pressure on the Reserve Bank of New Zealand to ease again this month. This would see a back-to-back rate cut and led to further calls for easing. Any dips into $1.1300 are likely to be used as a buying opportunity by traders. This level was a congestion zone in June and it’ll be interesting to see if it can hold.