Forex News: NZ Dollar Falls As European Stocks Traded Lower

NZ Dollar Falls As European Stocks Traded Lower

(RTTNews) - The New Zealand dollar weakened against other major currencies in the early European session on Monday, as European stocks traded lower as investors weigh the impact of U.S. President Donald Trump's latest tariff threats.

Trump on Saturday threatened to impose a 30 percent tariff on imports from Mexico and the European Union starting on Aug 1, even as they are locked in long negotiations.

Mexico slammed Trump's latest tariff threat as an "unfair deal" but expressed confidence that a trade deal could be reached before the August deadline.

The European Union has announced a delay to its countermeasures against the U.S. until early August to allow more time to negotiate a deal.

Germany's finance minister has called for firm action if the levies went ahead. French President Emmanuel Macron has called on the bloc to "resolutely defend European interests".

"We remain ready to continue working towards an agreement by August 1. At the same time, we will take all necessary steps to safeguard EU interests, including the adoption of proportionate countermeasures if required," President of the European Commission Ursula von der Leyen said.

Traders also look ahead to the start of earnings season, with the big U.S. banks due to report their quarterly results this week amid shifting interest-rate expectations.

In economic news, data from BusinessNZ showed that the services sector in New Zealand continued to contract in June, albeit at a slower pace, with a Performance of Services Index score of 47.3. That's up from the upwardly revised 44.1 in May.

In the early European trading today, the NZ dollar fell to nearly a 3-1/2-month low of 1.0973 against the Australian dollar, from an early high of 1.0946. The kiwi may test support around the 1.10 region.

Against the U.S. dollar and the euro, the kiwi slid to a 5-day low of 0.5976 and a 4-day low of 1.9537 from early highs of 0.6015 and 1.9432, respectively. If the kiwi extends its downtrend, it is likely to find support around 0.58 against the greenback and 1.96 against the euro.

The kiwi edged down to 87.99 against the yen, from an early high of 88.62. On the downside, 86.00 is seen as the next support level for the kiwi.

Looking ahead, Canada wholesale sales data for May is due to be released in the New York session.

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