- Fresh positive messages concerning G20 meet pleased Antipodeans.
- New Zealand current account data is on the spotlight.
Renewed optimism surrounding the US-China trade talks helped the NZD/USD pair to succeed it its second attempt of recovery as it trades near 0.6530 at the start of Wednesday’s Asian session.
The Kiwi benefited from the latest news suggesting that there will be a meeting between the US President Donald Trump and his Chinese counterpart at the sidelines of the upcoming G20 and both the leaders are positive ahead of the global gathering.
With the Chinese media also being positive on the trade talks, the Antipodeans showed little reaction to the negatives elsewhere. As a result, New Zealand’s lesser than expected GDT price index couldn’t do much harm to the Kiwi buyers.
Despite being on the road to recovery for the first time in 12 days, traders remain cautious ahead of first quarter current account data from New Zealand and the all-important FOMC meeting.
Forecasts suggest, current account – GDP ratio to shrink from -3.7% to -3.5% while the headline current account is likely increasing to $0.526 billion versus $-3.256 billion on a quarterly basis during Q1 2019.
Ahead of the event, analysts at TD Securities said,
Q1 current account deficit looks like shrinking to —NZD1.58b or -3.2% of GDP (from -3.7%). Exports rose by at least +2% q/q, while imports fell slightly (lagged impact of falling oil prices). Our tracking suggests that net exports could add up to +0.8%pts to Q1 GDP.
On the other hand, FOMC is less likely to alter its current monetary policy but Chairman Jerome Powell’s press conference and dot plot will be in the spotlight.
Technical Analysis
In order to extend the latest pullback towards 50-day simple moving average (SMA) around 0.6605, the pair needs to cross 0.6560 upside barrier, failing to do so continues to highlight 0.6510 and 0.6480 as immediate supports.
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