- The risk-off returns to markets, this time between the US and EU.
- Better than forecast New Zealand GDT Price Index, higher whole milk powder rate recently strengthened the Kiwi pair.
Having initially benefited from the US Dollar’s (USD) broad weakness, on the back of likely US-EU trade tensions, second-tier New Zealand data helped the NZD/USD to remain on the path of recovery towards 0.6670 by the start of Wednesday’s Asian trading session.
Proposal of levying fresh tariffs on the EU’s $4 billion worth of goods from the US Trade Representative’s office reversed earlier risk-on sentiment backed by US-China trade truce.
The resultant USD declines even ignored upbeat comments from the Cleveland Federal Reserve President Loretta Mester.
Global risk barometer, the US 10-year treasury yield, was again dragged below 2.00% mark to 1.0975 by the press time.
The Kiwi pair’s upside momentum gained additional strength after the New Zealand’s fortnightly release of the GDT Price Index came in better than -3.6% forecast to -0.4% with the key component whole milk powder also registering a rise to $3,302 a tonne from $3,208 prior.
Investors may now look forward to extra news on how the US-EU trade rift might develop while also keeping an eye over the developments surrounding the US-China if any. Further, New Zealand’s June month ANZ Commodity Price will be observed from the economic calendar.
Technical Analysis
In addition to the upside clearance of 200-day exponential moving average (200-D EMA) level of 0.6719, the quote needs to rise beyond latest high of 0.6728 in order to aim for mid-April highs of 0.6784, failure to do so can again fetch the quote to 100-D EMA support of 0.6662 and then to 0.6610 rest-points.
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