- NZD/USD is pulling back on the lack of details in the trad-deal news.
- NZD/USD will be paying attention to key domestic date in GDP and trade balance.
NZD/USD is starting out the week below the 0.66 handle following a pullback on Friday as market hysteria over the phase -one deal dissipates considering the lack of encouraging details that accompanies the headline. NZD/USD is trading at 0.6589 between a narrow range in a quiet session, so far, of between 0.6587 and 0.6601.
On Friday, the kiwi lost its traction due to the void detail around the US-China trade deal disappointed markets. The currency had earlier enjoyed a reasonable amount of lift, leading its commodity-linked peers against the USD, but ultimately collapsed into the red with its peers. Trade headlines will remain a driver but the domestic focus will be on NZ Q3 GDP. In recent trade, the New Zealand Institute of Economic Research has downgraded their Gross Domestic Produce outlook which is weighing on the kiwi and capping bullish attempts. The GDP growth outlook was revised down at 2.2% from the previous survey at 2.3%.
Robert Lighthizer attempts to bullish-up the trade deal headlines
Meanwhile, trade headlines will continue to be a focus. Both and Chinese officials announced on Friday that a deal they finally agreed to the phase one agreement after a contentious 18-month trade war. However, details are still murky and traders are looking for something more to go on, for now, it appears there is little which the US is getting from agreements that have been made in principle. Over the weekend, US lead negotiator, Robert Lighthizer, was speaking on CBS Lighthizer and said that the phase one US/China trade deal reached on Friday was “totally done,” and it will nearly double US exports to China over the next two years.
Key comments
“There’s a translation period. There are some scrubs, this is totally done. Absolutely."
“We have a list that will go manufacturing, agriculture, services, energy and the like. There’ll be a total for each one of those,” he said. “Overall, it’s a minimum of 200 billion dollars. Keep in mind, by the second year, we will just about double exports of goods to China, if this agreement is in place. Double exports.”
“But ultimately, whether this whole agreement works is going to be determined by who’s making the decisions in China, not in the United States,” Lighthizer said. “If the hardliners are making the decisions, we’re going to get one outcome. If the reformers are making the decisions, which is what we hope, then we’re going to get another outcome.”
Looking ahead for the week, the immediate US data calendar is second-tier but still worth noting with the December Empire State manufacturing survey from the NY Fed that is expected to show a modest +4 vs +2.9 in November while the NAHB housing market index is seen holding at a firm 70 in December. For New Zealand, GDP and the Trade Balance will be the key focus.
NZD/USD levels
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
USD/JPY flat-lines below 151.50 after soft Japanese CPI data
USD/JPY stays defensive below 151.50 after the release of a soft Japan's CPI report and mixed Industrial Production and Retail Sales data on Friday. Japanese verbal intervention also weighs on the pair amid the holiday-thinned conditions on Good Friday. US PCE inflation awaited.
AUD/USD buyers lack vigor above 0.6500 amid Good Friday trading lull
AUD/USD is trading listlessly above 0.6500 in the Asian session amid light trading on Good Friday. The Aussie pair shrugs off encouraging comments from China's FX regulator, as price action remains subdued ahead of the US PCE inflation data.
Gold flirts with record highs above $2,230, all eyes on US PCE data
Gold price flirts with record highs around $2,230 during the Asian session on Friday. The uptick of yellow metal is bolstered by the safe-haven flows amidst growing economic concerns and the prospect of interest rate cuts from the US Federal Reserve.
Optimism price could fall as nearly $90 million worth of OP tokens is due flood markets
Optimism volatility has shrunk in the ours leading to the network’s cliff unlock. It joins the likes of dYdX and Sui, which have similar events on their calendars. As token unlocks are often considered bearish catalysts, investors should brace for a reaction after the event.
Will they won’t they cut rates is the question of Q2?
There has been some significant push back from Fed and Bank of England members around the timing of rate cuts, and the Bank of Japan still haven’t physically intervened in the FX market to stem yen weakness although they are threatening to do so.