A bullish golden cross pattern (50-period moving average crossing above the 200-period moving average) has formed on the NZD/USD daily chart. The pattern comes in the context of mixed news for the kiwi.
Chinese officials reported on Wednesday that the Wuhan coronavirus has now killed at least 17 people in China and caused hundreds of confirmed infections. According to data from Johns Hopkins University there were 555 confirmed cases of the virus as of Wednesday evening. Officials have confirmed that it is contagious between humans. Cases have also been reported in Japan, Thailand, Taiwan, South Korea, Macau and the United States. Risk sensitive currencies such as the Australian dollar and New Zealand dollar were pressured by the news while the Japanese yen was lifted due to its safe-haven appeal.
Meanwhile, news of the signing of the ‘Phase One’ trade deal between the US and China last week was positive for the New Zealand dollar. China is New Zealand’s largest trading partner and upbeat news for China’s economy normally underpins the kiwi. Greater clarity on Brexit is another factor helping risk sensitive currencies such as the New Zealand dollar.
The Australian dollar rallied sharply on Thursday after a blockbuster jobs report lowered expectations of an RBA rate cut in February. The Australian Bureau of Statistics reported that the country's unemployment rate unexpectedly fell to a nine-month low of 5.1% in December and 28.9k new jobs were created, beating analyst expectations.
Further upbeat news for the kiwi came from global ratings agency Fitch, who held New Zealand's long-term credit rating at AA and upgraded the outlook to positive. Fitch stated that the upgrade in outlook reflected the country's sound fiscal management and declining level of government debt as a proportion of gross domestic product (GDP).
Investors now look to New Zealand's Consumer Price Index (CPI) data, due for release on Friday (New Zealand time). CPI is a key measure of changes in purchasing trends and inflation. Analysts expect year-over-year CPI to come in at 1.8%, close to the Reserve Bank of New Zealand's target of 2%.
Trading Futures, Options on Futures, and Foreign Exchange involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.