NZD/USD spikes above 0.6780, retreats quickly on conflicting US-China trade conflict headlines

• WSJ says US  officials weighing the option o lift tariffs on Chinese imports.
• A spokesman for the US Treasury denies the report’s claims.
• NZD/USD returns to negative territory after knee-jerk reaction.

The NZD/USD pair gained more than 40 pips in a matter of minutes after the Wall Street Journal reported that the U.S. officials were weighing the option to lift the tariffs on Chinese imports to calm the markets. However, with a spokesman for the U.S. Treasury denying these claims, the pair quickly erased a large part of its recent upsurge and was last seen trading at 0.6768, losing 0.17% on a daily basis.

 “Neither Secretary Mnuchin nor Ambassador Lighthizer have made any recommendations to anyone with respect to tariffs or other parts of the negotiation with China,” the spokesman said to cap the kiwi’s, which is sensitive to trade headlines surrounding the U.S. – China trade conflict, rally.

Meanwhile, the greenback showed a relatively muted reaction to these developments and the US Dollar Index stays in the positive territory above the 96 mark. In the next hour, investors will be looking for a fresh catalyst in the Business NZ’s PMI report.

Key technical levels