NZD/USD nears fresh five-month high on New Zealand Christmas holiday
|- NZD/USD benefits from downbeat US data, cautious optimism surrounding phase-one.
- China’s anticipated measures to lower financing costs also pleased export-oriented currencies.
- New Zealand markets are closed on Tuesday and Wednesday for Christmas and Boxing Day respectively.
Having surged to the fresh five-month high of 0.6640 before an hour, NZD/USD trades around 0.6632 during early Tuesday morning in Asia. The kiwi pair seems to have taken advantage of weaker than expected US economics and the latest optimism surrounding the US-China trade deal.
With the November month US Durable Goods Orders marking the sharpest declines since May, traders cared a little for better than forecast Chicago Fed National Activity Index. Additionally, weaker than expected New Home Sales also gave traders a reason to trim Friday’s heavy greenback gains.
On the trade front, the US President Donald Trump announced during the weekend that the US and China have achieved a milestone and will soon sign the phase-one deal. However, the passage of defense bill by the US weighed on optimism as China considered it as interfering with internal matters.
Recently, China’s Chinese State Councilor and Foreign Minister Wang Yi called on the US to work together with China to get China-US ties back on a healthy track, as per China’s Global Times.
Elsewhere, comments from Chinese Premier Li Keqiang signaled further reduction of Required Reserve Ratio (RRR) to lower financial costs. China being the world’s largest commodity user and a major customer to New Zealand, news like this helps increase the odds of higher demand at home, which in turn supports the domestic currency.
Looking forward, markets have settled into the year-end holiday mood with no major data/events up for publishing. However, trade/political headlines can offer intermediate moves to the traders.
Technical Analysis
The early-July low near 0.6660 is likely next target for the Bulls whereas the Bears will enter only if the pair sustain a break of monthly support line, at 0.6585 now.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.