- NZD/USD shows less reaction to the weekend’s China trade data.
- Optimism surrounding US-China trade meeting, weak US Dollar help the Kiwi.
- New Zealand’s second quarter (Q2) Manufacturing Sales to decorate economic calendar.
Having been the top G10 performer on Friday, NZD/USD awaits fresh clues to extend its latest recovery as it takes the rounds to 0.6418 at the start of Monday’s Asian session.
In spite of no major boost from New Zealand, the Kiwi pair managed to outperform its major counterparts as expectations of the US-China trade negotiations in October, coupled with a late-September US visit by Chinese deputies, joined downbeat Nonfarm Payrolls data from the US.
During the weekend, China released its August month trade data. While the headline Trade Balance lagged well behind $43.00B to $34.84B, Exports (YoY) slumped -1.0% versus an expected rise of 2.0% while Imports weakened to -5.6% from -6.0% forecast. It should also be noted that the dragon nation’s exports to the US fell16% YoY following a 6.5% drop in July while the imports from the US weakened 20% on a yearly basis.
While the current week has fewer catalysts from New Zealand, the Australia and New Zealand Banking Group (ANZ) holds its bearish bias towards 0.25% Official Cash Rate (OCR) by the end of 2020. They offer seven reasons supporting their expectations, such as “near-term growth indicators are inconsistent with RBNZ projections, inflation expectations are slipping, our Australian colleagues foresee similar cuts by the RBA which will put pressure on NZ financial conditions, a softer global growth environment, the labour market outlook, the RBNZ bank capital proposals (the May cut is a placeholder until we know the details – not that we can add many more cuts in when we do), and the deteriorating outlook for the dairy sector.”
Moving on, we have no major data on offer during the day, except Q2 Manufacturing Sales from New Zealand that grew 2.0% in the Q1 2019. As a result, investors will keep focusing on trade headlines and offshore events for fresh impulse.
Technical Analysis
50-day exponential moving average (EMA) surrounding 0.6480 and August 09 top, close to 0.6500, appear near-term strong resistances for the pair to cross in order to justify its strength in targeting August month high of 0.6490, failing to do the same could drag the pair back to 21-day EMA level of 0.6406 whereas 0.6360 and 0.6330 can entertain sellers afterward.
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
EUR/USD steady below 1.0800 after US PCE meets expectations
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips. Fed Chair Jerome Powell set to speak ahead of the weekly close.
GBP/USD hovers around 1.2620 in dull trading
GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.
Gold price sits at all-time highs above $2,230
Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.