NZD/USD Review: bounce into 0.6750 on RBNZ inflation call

• Kiwi bumps higher on softly-rising RBNZ inflation expectations.
• China trade figures show tariffs beginning to weigh on Asia trade; fears of knock-on effects could limit upside moves.

The NZD/USD is knocking above 0.6750 after the Reserve Bank of New Zealand (RBNZ) pushed their inflation expectations ever-so-slightly higher than the previous  quarter.

The RBNZ has set their Quarterly Inflation Expectations for 2018’s Q3 at 2.04%, a hair higher than Q2’s 2.01%. The move isn’t much to go on, but NZD bulls are jumping on the opportunity to find some goodwill towards the Kiwi, dragging the NZD/USD up from the day’s lows of 0.6725.

China’s Trade Balance shrunk by more than expected as US tariffs on Chinese goods begin to weigh on trade figures; China’s trade surplus in USD terms came in at $28.05 billion, below the forecast  $39.33 billion and far under the previous reading of $41.47 billion, as imports surged by 27.3% versus the last reading of 14.1%, but the Antipodeans are rolling with the trade headlines, and the Kiwi is jumping up on hopes of rising inflation as NZD traders shrug off China’s sagging trade balance; China is a major trading partner for both Australia and New Zealand, and too much pain in the US-China tariff war could see damage done to New Zealand’s domestic economy as well.

NZD/USD Technical Analysis

The Kiwi is hopping up on inflation hopes, pushing off of recent swing lows as the pair remains trapped in major consolidation on Daily candles; bulls may have found their  impetus for a springboard off of 0.6700 in the RBNZ, but trade continues to be a thorn in the side of the broader Asia-Pacific theater, and a failure to develop meaningful momentum into 0.6800 will drag the Kiwi back down below 0.6700 in short order.

NZD/USD Chart, 15-Minute