- NZD/USD remains under pressure following broad US dollar strength.
- Holidays in Wellington and the US limit the pair’s performance.
- Headlines concerning Libya and US-China trade deal could offer intermediate moves.
NZD/USD fails to defy the earlier weakness while trading around 0.6610 during the Monday morning in Asia. The pair bears the burden of broad US dollar strength and a lack of fresh impetus.
The US dollar managed to register broad gains on Friday as the latest data from the world’s largest economy suggest a re-think of the US Federal Reserve’s (Fed) “wait and watch” mode. Also supporting the greenback’s move our overall optimism surrounding the US economy based on the Trump administration’s ability to strike the key trade deals with China, Canada and Mexico.
Also supporting the Kiwi pair’s declines could be expectations of further monetary easing from the Reserve Bank of New Zealand (RBNZ). The central bank, even if not expected to announce aggressive monetary policy easing, will lag the fire-power as the Fed.
Furthermore, China’s central, the People’s Bank of China (PBOC), repeatedly undertakes measures to infuse the domestic economy but has a few successes so far. This could weigh on the commodity-linked currencies, like the New Zealand dollar (NZD), as China is the world’s largest commodity user.
The risk tone remains upbeat despite the geopolitical crisis in Libya and Iraq that propelled the oil prices.
New Zealand has a regional holiday in Wellington whereas markets in the US are off due to Martin Luther King’s Birthday. As a result, no major surprises are expected to roll-on and the greenback can keep its gains. Though, a resolution to the Libyan crisis and/or trade-positive news from either the US or China, concerning the phase-two deal, can help the pair witness a pullback.
Technical Analysis
The pair’s repeated failures to cross 21-day SMA, at 0.6654 now, grind it lower towards 0.6600 round-figure whereas last week's low near 0.6585 and 50-day SMA around 0.6555 can question the bears 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 consolidates gains below 1.0700 amid upbeat mood
EUR/USD is consolidating its recovery below 1.0700 in the European session on Thursday. The US Dollar holds its corrective decline amid improving market mood, despite looming Middle East geopolitical risks. Speeches from ECB and Fed officials remain on tap.
GBP/USD clings to moderate gains above 1.2450 on US Dollar weakness
GBP/USD is clinging to recovery gains above 1.2450 in European trading on Thursday. The pair stays supported by a sustained US Dollar weakness alongside the US Treasury bond yields. Risk appetite also underpins the higher-yielding currency pair. ahead of mid-tier US data and Fedspeak.
Gold price shines amid fears of fresh escalation in Middle East tensions
Gold price rebounds to $2,380 in Thursday’s European session after posting losses on Wednesday. The precious metal holds gains amid fears that Middle East tensions could worsen and spread beyond Gaza if Israel responds brutally to Iran.
Ripple faces significant correction as former SEC litigator says lawsuit could make it to Supreme Court
Ripple (XRP) price hovers below the key $0.50 level on Thursday after failing at another attempt to break and close above the resistance for the fourth day in a row.
Have we seen the extent of the Fed rate repricing?
Markets have been mostly consolidating recent moves into Thursday. We’ve seen some profit taking on Dollar longs and renewed demand for US equities into the dip. Whether or not this holds up is a completely different story.