The US dollar rebounded from multi-week lows, reinvigorated by its biggest daily gain against New Zealand’s dollar in four years. Buyers of the kiwi currency are catching a colossal price break after the nation’s central bank surprised many with a decision to slash interest rates by 25 basis points to 3.25 per cent. New Zealand’s dollar crashed nearly three per cent on the session and was flirting with its weakest level in five years. America’s currency was further rejuvenated ahead of data on the all-important consumer that is forecast to show a pickup in spending. Consumers have been reluctant to spend of late despite the job market dispensing more pay checks and gas prices remaining affordable. A solid showing by the consumer, the backbone of the world’s biggest economy, would put a Federal Reserve interest rate hike more firmly on the table and open the door to further dollar gains. The euro surrendered a three-week high with the market spotlight shifting back to the US Both the Australian and Canadian dollars lost ground in sympathy with the commodity sibling from New Zealand.

Euro

The euro was in a giving mood as the week’s first meaningful look at the world’s largest economy enticed many to cash in on the single currency’s recent out-performance. The euro has found a floor in rising European bond yields but it remains a wobbly one given that Greece had yet to clinch a deal with its creditors for more default-averting cash.

Sterling

Sterling dipped back below a key level against the greenback after the governor of the Bank of England was mum on interest rates. Those looking for a bullish catalyst for the pound from Carney’s Mansion House speech were disappointed, causing them to pull some profit off the table, weakening sterling in the process. Sterling may struggle to hold a gain until the UK economy looks sturdier and the Bank of England seems closer to raising interest rates.

US dollar

The dollar added to its session gains following mixed by generally positive US data. Consumers made a comeback in May with spending up a robust 1.2 per cent, a whisker better than expected. The spending spree will spell relief and hope that the economy’s first quarter downturn may prove temporary. It also keeps the Fed on course to boost rates. Weekly jobless claims rose a few more thousand than expected to 279,000, a still historically healthy level that marked 14 times in as many weeks under 300,000.

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