- NZD/USD benefits from the USD’s broad weakness.
- The US-EU trade tension, fears of the US recession play their role amid a light calendar.
- New Zealand’s ANZ Commodity Price, the US ISM Non-Manufacturing PMI and Factory Orders occupy the economic line.
With the US Dollar (USD) paring its gains against major currencies, the NZD/USD pair holds on to recovery gains while taking the bids to 0.6270 at the start of Thursday’s Asian session.
The Kiwi pair bounced off multi-month low on Wednesday after the sluggish print of the US ADP Employment Change and escalation in the US-EU trade tension added fuel to the previous speculations concerning the US recession.
With this, the greenback weakened across the board while ignoring comments from the President of the Federal Reserve Bank of New York, John Williams, who signaled that the US economy was in a favorable place.
On the contrary, commodity-linked currencies like the New Zealand Dollar (NZD) benefited from the USD’s declines despite pessimism surrounding the global trade front after the US got the World Trade Organization’s (WTO) go for fresh tariffs on the EU imports worth of $7.5 billion. As a result, the US Trade Representative’s office announced retaliatory tariffs of 10% on EU aircraft, 25% on agricultural, industrial goods in WTO aircraft subsidies case.
Investors will now look forward to New Zealand’s (NZ) ANZ Commodity Price Index data for September month, expected 0.4% versus 0.3% prior, as an immediate catalyst while also keeping an eye over the trade headlines amid China’s holidays. During the US session, the US ISM Non-Manufacturing Purchasing Managers’ Index (PMI) data for September, forecast 55.1 against 56.4 earlier, and the US Factory Orders for August, consensus -0.2% compared to 1.4% previous, will be closely followed together with a slew of the US Federal Reserve officials’ speech.
While China’s absence and a lack of major data could keep the Asian trading activity under pressure, the recent weakness of the USD might help the Kiwi going forward.
Technical Analysis
A three-week-old falling trend-line at 0.6285 acts as nearby upside resistance holding the keys to pair’s further recovery towards a 21-day simple moving average (SMA) level of 0.6330. However, a downside break of 0.6250 will recall sellers targeting 0.6200 round-figure.
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