- A combination of factors prompts fresh selling around NZD/USD on Friday.
- Reduced Fed rate cut bets and geopolitical tensions lift the USD to YTD top.
- Weaker Chinese trade data drives flow away from antipodean currencies.
The NZD/USD pair meets with a fresh supply on Friday and drops to a fresh daily low following the release of weaker Chinese trade data during the early European session. Spot prices reverse the previous day's modest recovery gains and currently trade near the lower end of the weekly range, around the 0.5970-0.5975 region.
Data published by the Customs General Administration of China showed that exports declined sharply, by the 7.5% YoY rate in March as compared to the 3.0% fall expected and the 7.1% growth registered in the January-February period. Adding to this, imports fell by the 1.9% YoY rate during the reported month against the 1.2% rise anticipated and the 3.5% previous. This points to weak global as well as domestic demand and adds to concerns about recovery in the world's second-largest economy, which, in turn, undermines antipodean currencies, including the Kiwi.
The US Dollar (USD), on the other hand, gains strong follow-through positive traction and hits a fresh YTD peak in the wake of expectations that the Federal Reserve (Fed) will delay cutting interest rates amid sticky inflation. Apart from this, persistent geopolitical tensions turn out to be another factor benefiting the safe-haven buck, which, in turn, is seen exerting downward pressure on the NZD/USD pair. The fundamental backdrop, meanwhile, suggests that the path of least resistance for spot prices is to the downside and any attempted recovery is likely to get sold into.
Market participants now look forward to the release of the Preliminary Michigan Consumer Sentiment Index. This, along with speeches by influential FOMC members, will drive the USD demand later during the early North American session and provide some impetus to the NZD/USD pair. Nevertheless, spot prices remain on track to register weekly losses, though manage to hold above the YTD trough, around the 0.5940 region touched last week.
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
AUD/USD holds steadily as traders anticipate Australian Retail Sales, Fed’s decision
The Aussie Dollar registered solid gains against the US Dollar on Monday, edged up by 0.55% on an improvement in risk appetite, while the Greenback was crushed by Japanese authorities' intervention. As Tuesday’s Asian session begins, the AUD/USD trades at 0.6564.
EUR/USD finds support near 1.0720 after slow grind on Monday
EUR/USD jostled on Monday, settling near 1.0720 after churning in a tight but lopsided range as markets settled in for the wait US Fed outing. Investors broadly expect US rates to hold steady this week, but traders will look for an uptick in Fed guidance for when rate cuts could be coming.
Gold advances for a third consecutive day
Gold fluctuates in a relatively tight channel above $2,330 on Monday. The benchmark 10-year US Treasury bond yield corrects lower and helps XAU/USD limit its losses ahead of this week's key Fed policy meeting.
Will Bitcoin ignore major macro market developments this week?
Bitcoin price will be an interesting watch this week, with increased volatility expected amid crucial events lined up in the macro market. On Tuesday, Hong Kong will be debuting its BTC and ETH ETFs while the next day will see FOMC minutes make headlines.
Gearing up for a busy week: It typically doesn’t get any bigger than this
Attention this week is fixated on the Federal Reserve's policy announcement scheduled for Wednesday. While the US central bank is widely expected to remain on hold, traders will be eager to discern any signals from the Fed regarding the possibility of future interest-rate cuts.