NZD/USD buyers remain cautious ahead of FOMC minutes and US-Sino negotiations
- The NZD/USD pair remains around 0.6870 on early Wednesday.
- The pair refrained from reflecting better than forecast New Zealand PPI numbers as caution prevails ahead of the FOMC minutes release from the US.
- Adding to skepticism was the challenge for the successful US-China trade deal considering the latest points raised for the US MoUs for China.
The New Zealand Dollar (NZD) trades little changed against the USD at 0.6870 during early Wednesday. The pair refrained to extend yesterday’s recovery as Kiwi buyers remain cautious ahead of the FOMC minutes. Recent criticism to the US diplomat’s anticipated demand from China to devalue Yuan also hurt antipodeans.
The NZD/USD pair refrained to respect better than forecast prints of PPI input (1.6% versus 1.1% consensus) and output (0.8% against 0.6% expected) as the Kiwi bulls remain cautious before the minute statement of the January 30 Federal Open Market Committee (FOMC) meeting will be released at 19:00 GMT today. The Federal Reserve met market consensus of holding the benchmark Fed rate unchanged at 2.5% while communicating required caution for future policy moves rather than emphasizing further on rate-hikes. Investors will look to confirm the recent bearish bias on the monetary policy and balance sheet for fresh impulse.
The US diplomats are working on a Memorandum of Understanding (MoU) for the Chinese Vice Premier Lui He February 20-21 visit. The proposal initially began pushing more for property rights and structural changes into the world’s second-largest economy but then moved to a much controversial demand of holding yuan capped against the USD.
Such a proposal to limit currency moves was widely criticized by global leaders, including ex-Fed Chair Janet Yellen, and is likely to raise bars for the successful trade deal. With this, antipodeans like AUD, NZD and CAD stopped extending their earlier advances as a no trade deal with the US is a threat to their largest consumer’s economy.
NZD/USD Technical Analysis
Inability to rise past three-week-old resistance-line, at 0.6885, favors the pair’s pullback to 0.6830, a break of which can print 0.6800 on the chart.
On the upside clearance of 0.6885, there prevails another trend-line barrier, at 0.6895, that may hinder the quote’s rise to 0.6900 and then to 0.6930 resistances.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
