NZD/USD: Bulls commit around 0.66 the figure on mixed trade sentiment
|- China’s readiness to discuss the trade deal raises the hope of good news amid the US-side pessimism.
- The much-anticipated rate-cut from RBA can signal the RBNZ’s rate moves.
Mixed response to the US-China trade-related comments offers volatile quotes of the NZD/USD pair around 0.6600 during the early Asian session on Tuesday.
While the US President Donald Trump’s threat to Chinese goods dragged the Kiwi pair down on Monday, global investors reacted differently to the Reuters’ news confirming the President Trump’s readiness for such a bold move.
Quoting slow progress over the US-China trade negotiation and recent swift in China’s tactics, President Trump announced readiness to levy an increased tariff of 25% on $200 billion worth of Chinese goods and fetch another $325 billion under the umbrella if they fail to seal the deal.
China is the world’s largest commodity user and hence markets turned risk-off on Monday after such news.
During early Tuesday, Reuters quoted the US-side negotiation leaders as they stood beside President Trump on his call for a tariff increase.
However, with Chinese delegation still to visit Washington on Thursday and Friday, few among the traders remained optimistic for the much-awaited deal.
There prevails no major data from New Zealand on Tuesday but a slew of top-tier releases from its latest customer Australia, including rate decision, retail sales, and trade balance, can offer liquidity to the New Zealand Dollar (NZD).
While the Reserve Bank of Australia (RBA) seems all set to announce 25 basis points (bps) cut to its cash rate, Reserve Bank of New Zealand (RBNZ) may also follow the suit of its close trade partner.
Technical Analysis
Only if the quote breaks 0.6590/80 area comprising lows since early January, sellers can aim for 0.6570 and 0.6510 rest-points otherwise chances of its run-up to challenge six-week-old resistance-line, at 0.6650 now, can’t be denied.
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