New Zealand Dollar Supported By G20 Hopes

Dan Blystone TradersLog.com

The New Zealand dollar entered an eighth consecutive day of gains against the U.S. dollar on Thursday, lifted by optimism ahead of the G20 summit set to commence on Friday. Earlier in the week the Kiwi got a boost after Stats NZ reported a wider-than-expected May trade surplus and the Reserve Bank of New Zealand held back from cutting interest rates.

G20 Meeting

China is New Zealand’s largest trading partner in goods and its second largest trading partner in services. A weakening Chinese economy typically has a negative effect on the value of the New Zealand dollar.

Presidents Donald Trump and Xi Jinping are set to meet at the G20 summit in Osaka, Japan taking place on taking place on June 28th and 29th. Positive news surrounding the meeting this week has helped to underpin the New Zealand dollar.

According to a report published on Thursday by the South China Post, the two superpowers have agreed to a “tentative truce” before the summit and that fresh tariffs are expected to be delayed.

RBNZ Holds Rates

On Tuesday the Reserve Bank of New Zealand kept rates on hold at 1.50 percent, as widely expected. While it refrained from cutting interest rates, the central bank did convey a dovish signal that it may lower the cash rate in the future. Investors focused on the fact that rates were not cut at the meeting, giving the New Zealand dollar a lift.

Technical Outlook

Looking at the daily chart above we can see that NZD/USD is nearing the 200 period simple moving average. Potential resistance looms above with the confluence of the 200 period simple moving average and the prior lows of 0.6704.

The Bottom Line

The market now eyes the G20 meeting in Osaka and whether China and the United States can really resolve their ongoing trade disputes. The outcome of the summit will impact the policy stance of the Federal Reserve. Further tariffs and a lack of progress will increase the chances of Fed rate cuts, while positive developments and an agreement to not impose more tariffs will lower the likelihood of Fed rate cuts.

Author

Dan Blystone

TradersLog.com

Experience Dan Blystone began his career in the trading industry in 1998. He worked as an arb clerk on the floor of the Chicago Mercantile Exchange (CME), flashing orders into the currency futures pits.

EUR/USD holds losses near 1.1850 as US, China holidays keep trade muted

EUR/USD opens the week on a softer note, trading near 1.1860 during the Asian session on Monday. Activity is likely to remain muted, with United States markets closed for the Presidents’ Day holiday, while Mainland China is also shut for the week-long Lunar New Year break.

GBP/USD flat lines as traders await key UK macro data and FOMC minutes

The GBP/USD pair kicks off a new week on a subdued note and oscillates in a narrow range, just below mid-1.3600s, during the Asian session. Moreover, the mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.

Gold remains below $5,050 despite Fed rate cut bets, uncertain geopolitical tensions

Gold edges lower after registering over 2% gains in the previous session, trading around $5,030 per troy ounce during the Asian hours on Monday. However, the non-interest-bearing Gold could further gain ground following softer January Consumer Price Index figures, which reinforced expectations that the Federal Reserve could cut rates later this year.

Top Crypto Losers: Dogecoin, Zcash, Bonk – Meme and Privacy coins under pressure

Meme coins such as Dogecoin and Bonk, alongside the privacy coin Zcash (ZEC), are leading the broader market losses over the last 24 hours. DOGE, ZEC, and BONK ended their three consecutive days of recovery with a sudden decline on Sunday, as crucial resistance levels capped the gains. Technically, the altcoins show downside risk, starting the week under pressure.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.