NZD/USD pops and drops after NZ CPI (Q1) beat forecasts
|- NZD/USD rises and then drops after New Zealand CPI data.
- Doubts over Trump administration’s proposal to re-open the economy recently probe trade sentiment.
- A light economic calendar will keep qualitative catalysts on the driver’s seat.
With the headlines inflation data coming in better than forecasts and prior, NZD/USD rises to the intraday high of 0.6052, currently around 0.6029, amid the Asian session on Monday.
Read: What You Need to Know For Markets Opening: There will be a keener focus on macroeconomics now
New Zealand’s (NZ) first quarter (Q1) Consumer Price Index (CPI) rose beyond 1.5% forecast and 1.9% prior to 2.5% on YoY. The CPI also marked an upbeat print of 0.8% versus 0.3% expectations and 0.5% previous readouts.
Read: NZ CPI Q1 +0.8 PCT vs pvs QTR 0.5% and +0.3 exp
Even so, the data carries a little importance considering the RBNZ’s readiness to ease the monetary policy further, if needed, as well as push for the fiscal measures to combat the pandemic.
It should also be noted that the latest risk-reset could also be considered as weighing on the pair. Traders seem to reconsider the previous risk-on bets based on the increasing odds for the US economy’s likely restart as well as promising details on the Gilead’s Remdesivir testing.
The reason could be probed from the latest US COVID-19 tally from Reuters that suggests the death toll crossing 40,000 mark whereas total infections surging past-740,000. Further, US President Donald Trump, in his latest task force briefings, said that they are getting closer to a deal on the additional stimulus and the answer could be available on Monday. The Republican leader also mentioned that Vice President Mike Pence will talk to the state governors on Monday and will discuss what can be done to further coronavirus response.
While portraying the risk-tone S&P 500 Futures drop 0.70% to 2,848 by the press time.
Despite witnessing the upbeat Kiwi data, the current pessimism, due to the pandemic, might keep weighing on the commodity-linked currencies, including NZD/USD. As a result, traders will give more importance to the upcoming virus updates for fresh direction.
Technical analysis
Sellers will look for entry below 0.5965 comprising 21-day SMA while targeting the monthly low around 0.5840. On the contrary, the pair’s ability to stay above 21-day SMA signals its eagerness to probe 50-day SMA, currently near 0.6125, ahead of aiming to challenge the monthly top of 0.6131 for one more time.
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.