NZD/USD refreshes four-month low under 0.6300 after New Zealand Trade Balance

  • NZD/USD remains on the back foot despite mixed readings of New Zealand Trade Balance.
  • The pace of coronavirus spread outside China keeps the risk-tone heavy, Wall Street benchmark keeps the losses.
  • Second-tier Aussie, New Zealand data can entertain traders ahead of the key US Durable Goods Orders, GDP.
  • US President Donald Trump’s press conference on coronavirus awaited for now.

NZD/USD registers three-day losing streak while declining to 0.6290, intra-day low of 0.6288, following the release of New Zealand (NZ) trade numbers during early Thursday morning in Asia.

NZ trade details disappoint

New Zealand’s January month Trade Balance flashed mixed signals as the YoY figure recovered to $-3.87B from downwardly revised $-4.46B prior whereas the monthly data suggest $-340M figure against $384M previous readouts. Further details signal that both Exports and Imports slipped below the prior data while marking $4.73B and $5.07B numbers respectively versus $5.5B and $5.12B earlier readings.

In a reaction to the data, the Kiwi pair extends its latest declines led-by China’s coronavirus. However, analysts at the Australia and New Zealand Banking Group (ANZ) see positive support to the NZ economy due to weak New Zealand dollar as they said, “News around COVID-19 and it's spread and knock-on impact on the world economy remain the dominant theme, with factory disruptions in Italy, fiscal easing in Germany and the first case in Latin America among fresh news.”

Coronavirus keeps the risk-tone heavy…

Even if the US 10-year treasury yields paddled back from their multi-year low, to 1.342% by the press time, the global markets fear the outbreak of China’s deadly coronavirus (COVID-19) into the rest of the world. The knock-on impact of the pandemic could be cited by the factory disruptions in Italy, push to Germany towards fiscal easing and Latin America’s first case of the coronavirus. In Asia, South Korea becomes new China as it registers more than 1,000 cases of coronavirus so far compared to below 100 a week ago.

While portraying the risk-off, Wall Street benchmarks continue to dive into the sea of red whereas S&P 500 Futures decline nearly 0.70% to 3,110 by the time of writing.

Moving on, the US President Donald Trump is up for speaking on coronavirus at 23:30 GMT and his comments can be watched as an immediate catalyst. After that, New Zealand’s ANZ Business Confidence and Activity Outlook for January, followed by Australia’s Private Capital Expenditure data for the fourth quarter (Q4) will be important to watch ahead of the key US GDP and Durable Goods Orders.

Technical Analysis

With the pair’s sustained trading below 0.6300, NZD/USD prices are gearing up to revisit October 16 low surrounding 0.6240 whereas November 2019 bottom close to 0.6315 acts as the immediate resistance.

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