NZD/USD back at the 0.7250 mark as strong dollar, downbeat risk appetite weigh on the kiwi


  • NZD/USD is consolidating around the 0.7250 mark having slipped back from earlier Asia Pacific and European session highs around 0.7300.
  • Looming US risk events over the next two days could shake things up.

NZD/USD is consolidating around the 0.7250 mark having slipped back from earlier Asia Pacific and European session highs in the 0.7300 region amid a modest pick-up in the US dollar on the day. The buck is seemingly trending higher primarily as a result of rising US government bond yields.

With NZD/USD having failed to break back into the 0.7300 region, the sellers regained control and pushed the pair back to within the confines of this week’s range. To the downside, the bottom of this range appears to be marked out by Tuesday’s sub-0.7210 low, while Wednesday’s highs of just above 0.7300 mark the top.

Tier one US data releases on Wednesday appear to have weighed on sentiment, although have failed to shake NZD/USD up enough to trigger a breakout of recent ranges. However, looming US risk events on over the next two days could provide some direction again; Thursday sees Fed Chair Jerome Powell speaking and the release of Weekly Jobless Claims numbers, while Friday sees the release of the February Labour Market Report, which will be the main event of the week from a global macro perspective.

Driving the day

Positive commentary from US President Joe Biden failed to boost the market’s broader appetite for risk on Wednesday, with NZD suffering as a result; the US President reportedly said that the country would have enough Covid-19 vaccines for every adult to receive their first vaccine by the end of May, after pharmaceutical giant Merck & Co agreed to participate in the production of Johnson & Johnson’s recently approved Covid-19 vaccine.

As noted above, focus instead seems to have returned to bond markets amid another surge higher in US government bond yields; US 10-year yields hit highs of not far from the 1.50% on Wednesday and are currently around 7bps higher on the day. Markets fear a return to the kind of price action seen last week, where yields were moving as much as 20bps per day. As a result, US equities are a little lower, with the S&P 500 down half a percent.

Further weighing on risk appetite on Wednesday has been worse than expected US data; The recently released February ISM Services PMI survey was underwhelming, with the headline index dropping to 55/3 versus expectations it would remain steady at 58.7. The subindices also showed weakness, with Business Activity dropping to 55.5 from 59.9 in January, Employment dropping to 52.7 from 55.2 in January and New Orders dropped nearly 10 points to 51.9 from 61.8. Capital Economics think the weakness represents severe winter weather conditions seen across the country last month. Meanwhile, Prices Paid shot higher to 71.8 from 64.2 amid supply shortages, a jump which Capital Economics thinks may foreshadow an increase in Core PCE to about 2.4% within the next few months.

Sticking with the theme of US data, Wednesday also saw the release of ADP’s estimate of the number of jobs added to the US economy in February; their estimate suggests the economy gained 117K jobs, lower than expectations for their estimate to show a job gain of 177K jobs. Capital Economics note that this data was a disappointment given that “the drop-off in coronavirus case numbers and the resulting lifting of containment measures should be giving the economy a bigger shot in the arm”. The economic consultancy continues that “the disappointing ADP figure presents a clear downside risk to our otherwise above-consensus estimate that non-farm payrolls increased by 500,000 last month”, but they caveat that “given the ADP's patchy correlation with the official employment data and the strength of the high-frequency data, we are happy to stick with that estimate”.

NZD/Usd

Overview
Today last price 0.7258
Today Daily Change -0.0042
Today Daily Change % -0.58
Today daily open 0.73
 
Trends
Daily SMA20 0.7256
Daily SMA50 0.72
Daily SMA100 0.7039
Daily SMA200 0.6804
 
Levels
Previous Daily High 0.7308
Previous Daily Low 0.7209
Previous Weekly High 0.7466
Previous Weekly Low 0.7223
Previous Monthly High 0.7466
Previous Monthly Low 0.7135
Daily Fibonacci 38.2% 0.727
Daily Fibonacci 61.8% 0.7247
Daily Pivot Point S1 0.7237
Daily Pivot Point S2 0.7174
Daily Pivot Point S3 0.7138
Daily Pivot Point R1 0.7336
Daily Pivot Point R2 0.7371
Daily Pivot Point R3 0.7434

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Get Weekly Crypto trade ideas!  
Empower yourself with the best market insights

Join FXStreet Premium!    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD slips from highs as investors await US Retail Sales

EUR/USD has backed down from the highs near 1.20 as the dollar benefits from the Fed's upbeat mood. All eyes are on US Retail Sales, which are set to leap. 

EUR/USD News

GBP/USD rises toward 1.38 ahead of US data, Brexit meeting

GBP/USD is edging up toward 1.38, reversing its previous falls in tense trading ahead of all-important US retail sales. A Brexit-related meeting on Northern Ireland is also eyed. 

GBP/USD News

Bitcoin on-chain data shows BTC is reaching “peak hype”

Bitcoin’s on-chain data suggest a short-term correction may be needed before Bitcoin could continue its price rally. Market sentiment toward Bitcoin poses a major concern for the cryptocurrency, indicating it is approaching “peak hype.”

Read more

XAU/USD looks to retest $1750 as USD bounce fizzles ahead of US Retail Sales

Gold is breaking higher as the US dollar rebound loses steam. The US Treasury yields retreat ahead of the Retail Sales release. XAU/USD is teasing symmetrical triangle breakout on the 1H chart.

Gold News

Breaking: Coinbase jumps 10% pre-market: ARK's Cathie dumps Tesla (TSLA) to COIN it in

Cathie Wood of ARK Invest fame clearly likes the crypto space as her ARK Invest fund purchased $246 million worth of COIN on the first day of trading.

Read more

Forex MAJORS

Cryptocurrencies

Signatures