The New Zealand dollar declined slightly today after terror activity in the country. The police arrested four people, who left 49 people dead in Christchurch. More people were injured in what appears to be a right-wing attack. In addition, one of the attackers appeared to have filmed the attack and streamed it live in social media. Christchurch is the fourth-largest city in the country. In response, the kiwi declined by about 20 pips.
The Japanese yen was little moved in the European session. This happened after the Bank of Japan released its monetary policy decision. As expected, the bank left interest rates unchanged at minus 0.1%. The bank also said that it would leave the ten-year Japan Government Bonds (JGBs) at close to zero. The bank raised the worry of decelerating export and import business in the country. The BOJ is between a rock and a hard place because while its plans to stimulate growth have worked, it has failed to stimulate inflation. Japan has a low unemployment rate at 2.5% and the GDP is growing, albeit slowly but inflation remains below the target of 2%
The euro declined slightly against the USD after it emerged that Italy was set to formally endorse China’s Bridge and Road Initiative (BRI) and take a loan from the country. This is despite increased opposition from the European Union and United States. This happened a day after Malta, another EU member announced that it might endorse the project. This memorandum of understanding will be signed on March 22 when Xi Jinping will be in the country. To counter the EU narrative about the deal, Italy is considering using AIIB, a Chinese development bank that lends according to international standards. On economic data, the EU released inflation data that was in line with expectations. The headline COI number rose by 1.5% while the core CPI number rose by 1.0%.
The USD was little moved after weak economic data from the United States. The New York Empire State Manufacturing Index for March declined to 3.70. This was lower than the expected 10 and last month’s 8.8. The industrial production rose by 3.5%, which was lower than January’s 3.8%. On a MoM basis, the production rose by 0.1%, which was lower than the expected 0.4%. At the same time, the manufacturing production sank by minus 0.4%, which was lower than the expected 0.3%.
The NZD/USD pair declined today after the terror attack in New Zealand. The pair fell from a high of 0.6858 to a low of 0.6838. On the hourly chart, the pair is along the middle line of the Bollinger Bands. It is also along the 61.8% Fibonacci Retracement level while the RSI too is declining. The pair will likely continue moving lower to test the 50% Fibonacci Retracement level of 0.6825.
The GBP/USD pair declined to an intraday low of 1.3230, which was along the consolidation level started yesterday. Investors are now in wait and see mode as they wait on what will happen about Brexit. On the hourly chart, the pair has formed a symmetrical triangle pattern while the price is along the 21-day and 42-day moving averages. The price is along the middle line of the Bollinger Bands. The pair could remain within this channel for a while before it breaks out in either direction.
The EUR/USD was little moved after the release of the industrial production and manufacturing numbers. The pair is now trading at 1.1315, which is slightly lower than the open price of 1.1330. On the hourly chart, the pair is along the middle line of the Bollinger Bands. The price is also along the Tenkan-sen and Kiju-sen lines of the Ichimoku Kinko Hyo. There is a likelihood that the pair will continue moving upwards to test the important resistance level of 1.1350.
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