NZD/USD: Quiet start in Asia tests rebound from four-month low towards 0.7000
- NZD/USD fades bounce off late November 2020 lows.
- Fears of Chinese securities’ delisting, North Korea’s missile tests add to the risk-off mood.
- Light calendar in Asia pushes traders toward risk catalysts for fresh impulse.
NZD/USD struggles to rebound from multi-day low, flashed the previous day, while bouncing back towards 0.6965 during the initial Asian session on Thursday. In doing so, the kiwi pair remains pressured near the lowest levels since November 2020 amid fresh challenges to the market sentiment and a light calendar in Asia.
North Korea fires missiles, US prepares for delisting Chinese firms…
Reuters recently came out with the news citing Japan’s Coast Guard to convey that North Korea may have launched a ballistic missile. “Japan coast guard warns ships against coming close to falling objects, calls on them to provide information,” the news said. Elsewhere, the US Securities and Exchange Commission (SEC) adopted measures, on Wednesday, which would kick foreign companies off American stock exchanges if they do not comply with U.S. auditing standards, and require them to disclose any governmental affiliations, per Reuters. This mainly affects Chinese firms who were on the verge of leaving the American bourses during the final days of Donald Trump as the US President.
Other than the aforementioned risks, fears of reflation and fading of New Zealand’s allure, amid recently downbeat data, joins China’s trade war with the US and geopolitical tussle with the West to weigh on risks. Elsewhere, the Fed and US Treasury remain firm to offer more and consistent stimulus fails to convince markets and also weigh on the sentiment.
The risk aversion wave weighs on the US 10-year Treasury yields that dropped for the third day in a row and helped the US dollar index (DXY) to refresh its yearly top. However, the NZD/USD traders need more clues to extend the latest south-run.
As a result, a lack of major data/events keeps troubling the kiwi traders by the press time and hence bears seem tired but not out of the woods.
Read: The February Grab-Bag Preview: Personal Income, Spending, Core PCE Prices and GDP
Technical analysis
A clear break below 0.7000, comprising multiple lows marked during late 2020, directs NZD/USD towards 200-day SMA around 0.6870.
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.
