NZD/USD on session highs

New Zealand dollar continued its movement upwards against the greenback, reaching session highs during Monday trade, as the earlier released Input Producer Price Index out of New Zealand was still supporting the kiwi.

NZD/USD hit its highest point on Monday at 0.8140 at 6:11 GMT, after the pair advanced 0.82% last week. Support was likely to be found at August 14th low, 0.7957, while resistance was to be encountered at June 14th high, 0.8135.

Today Statistics New Zealand reported that the Input Producer Price Index (PPI) advanced 0.6% during the second quarter of the year compared to the first in line with expectations, after a 0.8% gain in Q1.

Additionally, the Output Producer Price Index rose by 1.0% in Q2 compared to Q1, following the 0.8% gain during the preceding period, while preliminary estimates pointed a 0.7% increase. Prices of dairy products caused the main influence behind these results. Dairy products were 14% more expensive during the second quarter of the year.

Also, Business NZ Performance of Services Index (PSI) came in at 58.1 in July, following Junes reading of 55.1, which was a revision up from 55.0 previously. The level of 50.0 is an average level, that separates expectations of development and expectations of recession, as the more values distance from this level the stronger each of these expectations are.

Meanwhile, the New Zealand currency was given a boost on Friday after the release of mixed economic reports out of the United States. The preliminary value of the index of consumer confidence, tracked by the University of Michigan and Thomson Reuters, came in at 80.0 in the month of August, down from 85.1 in July, marking its lowest reading since April. Experts had anticipated that the index will show improvement to a value of 85.3. Earlier on Friday it became clear that housing starts in the United States rose by 5.9% in July to 0.896 million houses on a monthly basis, as in June the indicator showed a 0.846 million houses. Even with this data expectations are still present that the Federal Reserve Bank may begin scaling back its asset purchases as soon as September.

Elsewhere, the kiwi was trading higher against the Aussie, as AUD/NZD cross dropped by 0.19% to 1.1318 at 6:47 GMT.