Home NZD/USD nears two-month low to 0.6465 ahead of China’s Caixin PMI
FXStreet News

NZD/USD nears two-month low to 0.6465 ahead of China’s Caixin PMI

  • NZD/USD bears the burden of coronavirus fears.
  • New Zealand’s increasing trade ties with China makes it difficult to cheer recovering data at home.
  • Chinese markets open after the Lunar New Year holidays, Caixin PMI will be the key.

NZD/USD fails to ignore the broad risk-off while keeping losses to 0.6465 during the early Monday’s Asian session. The kiwi pair nears the lowest since December 02, 2019, while also extending the downpour after the five consecutive weeks. The reason for the current selling emanates from China where fears of coronavirus outbreak have largely affected the economics. Traders will now concentrate on the Beijing reopen and Caixin Manufacturing PMI for fresh impulse.

China’s coronavirus has so far affected 14,557 people across the globe, most of which are in China, according to the World Health Organization (WHO) data conveyed by CNBC. The epidemic also crosses 300 mark as far as the death toll is concerned. To safeguard, global airlines have shut their doors to and from China. Further, the American Airlines Group has recently announced the ban to foreign nationals into the US if they have traveled China within the last 14 days. The group has also extended locks to China till March 27.

The WHO has already termed coronavirus as the global health emergency as it surpassed the SARS. Though, another virus from China, H5N1, is in its nascent stage and could add worries to the global economies.

While portraying the risk-off, the Australian bonds drop to the historical low of 0.884% by the press time.

In addition to the risk aversion that has a negative impact on commodity-linked currencies like the New Zealand dollar, the recent increase in New Zealand’s export of milk and meat to China has also added negatives to the NZD/USD pair.

Investors will now concentrate on how Chinese markets perform during their first day of trading after the Lunar New Year break. Regulators from Beijing have taken various steps to identify the fears of bloodshed selling.

On the data front, China’s January month Caixin Manufacturing PMI, expected 51.3 versus 51.5 prior, will be closely watched to gain insights into how the dragon nation is being affected by the lethal disease. This is the private version of activity data while the official release has already shown a minimal impact with 50.00 mark versus 50.2 earlier.

Technical Analysis

50% Fibonacci retracement of the pair’s October-December upside, at 0.6480, offers the immediate resistance ahead of 200-day SMA around 0.6510. On the downside, 0.6430 and 61.8% Fibonacci retracement close to 0.6415 can question the sellers.

 

FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.