- Trade wars, the US manufacturing data continue to disappoint Kiwi buyers.
- Likely improvement in domestic housing market data could trigger short-term recovery.
The NZD/USD is taking rounds near 0.6515 at the start of Thursday’s Asian session. The pair dropped heavily yesterday as an escalation in trade tension between the US and China joined another print of soft manufacturing data from the US. Investors may now await April month building permits while also observing budget and trade war developments for fresh impulse.
China’s readiness to limit rare earth metal’s exports to the US added fuel to already intense relations between the world’s two largest economies, which in turn propelled risk-off.
Global treasury yields, generally considered a barometer of market risk sentiment, declined heavily with the US 10-year benchmark trimming 2 basis points by the Wednesday end ahead of holding 2.262% at the press time.
Adding to the Kiwi weakness could be doubts over the future commodity demand after the latest print of Richmond Fed manufacturing data lagged behind 6 forecasts to print 5. The manufacturing gauge becomes another weak manufacturing data from the world’s largest economy after previous Dallas Fed manufacturing index.
While the US-China plays could keep offering background music to market, seasonally adjusted building permits may recover to 1.3% from -6.9% prior.
The annual budget may gain lesser attention from currency traders as some part of it was already leaked. However, the portion of debt offered and comments on how latest trade jitters have added to the country’s fiscal situation will be important to follow.
Technical Analysis
Only if the quote manages to stay strong beyond 0.6515 it can revisit 0.6560 and April month low near 0.6585 otherwise its further declines towards 0.6480, October 2018 low surrounding 0.6425 and 0.6400 round-figure can’t be denied.
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