NZ dollar rally takes breather

Kenny Fisher MarketPulse

The New Zealand dollar has posted limited losses in the Friday session. Currently, NZD/USD is trading at 0.7160, down 0.13% on the day. It has been an excellent week for NZD/USD, which has gained 1.86%.

New Zealand Manufacturing PMI shines

New Zealand wrapped up the trading week with an excellent reading from Manufacturing PMI for March. The index rose to 63.6, up sharply from 53.4 beforehand. This was the highest monthly result since the survey began in 2022, and points to stronger demand.

New Zealand’s export-reliant economy is benefitting from an improving global economy. China is one of New Zealand’s largest trading partners, and the Asian giant is showing strong growth, and with it an increased demand for imports from New Zealand and elsewhere. China’s GDP in the first quarter jumped by 18.3% compared to a year earlier. This marked a record quarter, but of course, it needs to be remembered that this is due to a low comparison base, as the economy was experiencing a downturn a year ago, due to the Covid-19 pandemic. China is expected to show solid growth in 2021, which should translate into stronger demand for New Zealand exports and bodes well for the New Zealand dollar.

The economy has recovered nicely from the Covid pandemic, but at the same time, the New Zealand central bank remains cautious and in a dovish mood. At this week’s policy meeting, members held the Overnight Cash Rate at 0.25%, a record low. The RBNZ added that if needed, it was prepared to lower rates even further. The bank kept its QE programme (LSAP) unchanged and noted that it will take “considerable time and patience” before it reaches its inflation and employment goals.

NZD/USD technical

NZD/USD is testing resistance at 0.7144. This is followed by 0.7212, an important monthly resistance line.
There is support at 0.6998. Close by, we have support at 0.6961.

Author

Kenny Fisher

MarketPulse

A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities.

EUR/USD trims gains, hovers around 1.1900 post-US data

EUR/USD trades slightly on the back foot around the 1.1900 region in a context dominated by the resurgence of some buying interest around the US Dollar on turnaround Tuesday. Looking at the US docket, Retail Sales disappointed expectations in December, while the ADP 4-Week Average came in at 6.5K.

GBP/USD comes under pressure near 1.3680

The better tone in the Greenback hurts the risk-linked complex on Tuesday, prompting GBP/USD to set aside two consecutive days of gains and trade slightly on the defensive below the 1.3700 mark. Investors, in the meantime, keep their attention on key UK data due later in the week.

Gold loses some traction, still above $5,000

Gold faces some selling pressure on Tuesday, surrendering part of its recent two-day advance although managing to keep the trade above the $5,000 mark per troy ounce. The daily pullback in the precious metal comes in response to the modest rebound in the US Dollar, while declining US Treasury yields across the curve seem to limit the downside.

XRP holds $1.40 amid ETF inflows and stable derivatives market

Ripple trades under pressure, with immediate support at $1.40 holding at the time of writing on Tuesday. A recovery attempt from last week’s sell-off to $1.12 stalled at $1.54 on Friday, leading to limited price action between the current support and the resistance.

Dollar drops and stocks rally: The week of reckoning for US economic data

Following a sizeable move lower in US technology Stocks last week, we have witnessed a meaningful recovery unfold. The USD Index is in a concerning position; the monthly price continues to hold the south channel support.