- NZD/USD comes under some selling pressure amid trade uncertainty.
- The downside remains cushioned amid a subdued USD price action.
The NZD/USD pair refreshed daily lows, around the 0.6500 handle in the last hour, and has now erased a major part of the previous session's positive move to four-month tops.
The pair failed to capitalize on its goodish positive move witnessed over the past two trading session and came under some selling pressure on Wednesday in reaction to a further escalation in tensions between the world's two largest economies.
Focus remains on trade developments
It is worth recalling that the US President Donald Trump on Tuesday indicated that a trade deal with China might have to wait until late 2020. Adding to this, the US Congress overwhelmingly approved a bill condemning China’s mass detention of ethnic Muslims in the western region of Xinjiang.
The latest developments came after Trump last week signed a bill supporting Hong Kong’s pro-democracy protesters. This coupled with China's warning to retaliate was seen as another setback to the trade negotiations, which weighed on the global risk sentiment and exerted some pressure on perceived riskier currencies – like the kiwi.
Meanwhile, comments by China's foreign ministry did little to ease market concerns, rather contributed to the latest leg of a slide over the past hour or so. China's foreign ministry said that the US will pay the price over Hong Kong and Xinjiang bills and they will not set any timeline or deadline for a trade deal with the US.
The downtick, however, remained limited, at least for the time being, and was being cushioned by a mildly weaker tone surrounding the US dollar. Against the backdrop of the recent dismal US macro data, some renewed weakness in the US Treasury bond yields held the USD bulls on the defensive and seemed to be the only factor lending some support.
Moving ahead, market participants now look forward to the US economic docket, highlighting the release of ADP report on private-sector employment and ISM Non-Manufacturing PMI, which has the potential to influence the USD price dynamics and might produce some short-term trading opportunities later during the early North-American session.
Technical levels to watch
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 clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.