NZD/USD: Previous week's gains have been erased
|- NZD/USD has surrendered previous week's gains with a 1% slide on a week-to-date basis.
- Dismal NZ jobs data has bolstered rate cut bets, sending Kiwi lower.
NZD/USD has pretty much erased the gains seen last week despite the easing of US-China trade tensions.
The currency pair is currently trading at 0.6353, representing a 1.06% loss on a week-to-date basis, having hit a high of 0.6466 on Monday. The pair had rallied from 0.6351 to 0.6456 last week.
The US and China said last Friday they have made progress in addressing trade issues, with US officials indicating that a deal could be signed this month. The kiwi, therefore, clocked a multi-week high of 0.6466 on Monday, courtesy of an upbeat mood in the financial markets.
The move higher, however, was short-lived, as markets put a bid under the greenback, possibly on fears that the Fed would end easing cycle on de-escalation of trade tensions.
Further, the Kiwi came under pressure due to dismal New Zealand jobs data released Tuesday. The seasonally adjusted unemployment rate rose to 4.2% in the three months ended Sep. 30, from 3.9% in the June quarter, Stats NZ said.
The data has bolstered expectations for an RBNZ rate cut next week. The spread between the NZ and US 10-year government bond yields has dropped to -48 basis points from the high of -38 basis points seen last week.
The NZD, therefore, is on the defensive and could continue to lose altitude while heading into the weekend – more so, as doubts have emerged over prospects of the US-China trade deal. As per Reuters, a meeting between US President Donald Trump and Chinese President Xi Jinping to sign a long-awaited interim trade deal could be delayed until December as discussions continue over terms.
Technical levels
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