- China reportedly approved purchases of US soybeans as goodwill.
- NZ reports a wider-than-expected trade surplus in June.
- US Dollar Index stays flat on the day near 97.70 ahead of PMI data.
The NZD/USD spent the first half of the day fluctuating in a narrow band below the 0.67 handle but staged a modest rebound in the last couple of hours boosted by renewed US-China trade optimism. As of writing, the pair was up 0.1% on the day at 0.6710.
During the early trading hours of the Asian session, the data published by the Statistics New Zealand revealed that the trade surplus widened to $365 million on a monthly basis in June to beat the market expectation of $100 million but failed to help Kiwi gather strength against its peers.
On the other hand, following yesterday’s impressive rally that lifted it to its highest level since late May at 97.81, the US Dollar Index has gone into a consolidation phase as investors withdrew to the sidelines ahead of the IHS Markit’s Manufacturing and Services PMI reports, which are expected to show business activity in both sectors picking up in July when compared to June. At the moment, the DXY is flat on the day at 97.70.
Trade headlines help antipodeans
Earlier in the session, several news outlets reported that China has approved purchases of US soybeans as goodwill ahead of Monday’s high-level talks, reviving optimism about the trade conflict finally moving toward an end. Meanwhile, during an interview with CNBC, US Treasury Secretary Mnuchin explained that he was expecting more than a few more US-China meetings before reaching a potential trade deal. “The US has a long list of issues to work out with China on trade,” Mnuchin added, not allowing the pair to push higher.
Technical levels to watch for
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