Search ForexCrunch
  • NZD/USD prints three-day winning streak, battles weekly high following its bounce off 0.7163.
  • New Zealand Food Price Index drop 0.9% in February.
  • Downbeat data at home and US battles China’s welcome inflation figures, US stimulus and 10-year Note Auction also favor bulls.
  • Risk catalysts remain as the key, US President’s speech, signing of the $1.9 trillion aid package will gain major attention.

NZD/USD takes round to 0.7200 while poking weekly high, easing off-late to 0.7190, amid the early Thursday morning in Asia. Recently released New Zealand data seems to probe bulls cheering downbeat US Treasury yields and positive coronavirus (COVID-19) vaccination plan at home. Though, bulls remain hopeful ahead of today’s US President Joe Biden’s speech and Friday’s signing of the much-awaited American fiscal stimulus.

New Zealand’s Food Price Index slipped below +1.3% MoM to -0.9% in February. The recently released data joins the previous day’s downbeat Electronic Card Retail Sales to raise bars for the NZD/USD buyers. Though, softer inflation figures from the US contrasts China’s welcome Consumer Price Index (CPI) and Producer Price Index (PPI) data to back the bulls.

The main catalysts, however, could be the passages of the US $1.9 trillion stimulus package and weaker than the market rates of US 10-year Treasury yields in the latest Note Auction. US President Joe Biden’s much-awaited coronavirus (COVID-19) relief package crossed the final hurdle a few hours back and is ready to be signed by President Biden, likely on Friday.

Ahead of the signing, US President Biden is also up for a public speech and may convey his economic optimism to please the kiwi buyers. On the same line, market chatters that the Democratic Party member is up for $2.5 trillion infrastructure stimulus, mostly to be proposed in May, are also live and favor the risk-on mood.

At home, New Zealand unveiled details of vaccinations and signals “back to normal by early 2022″.

On the contrary, US Secretary of State Antony Blinken recently criticized Human Rights violations in Hong Kong and turned down hopes of easing tension with Iran. Both these different statements challenge the sentiment.

Amid these plays, Wall Street benchmarks stay firmed whereas the US 10-year Treasury yields drop for the second day, down 1.9 basis points (bps) to 1.525%, by the end of Wednesday’s North American trading session.

Looking forward, US weekly jobless claims and ECB can propel market moves but Biden’s words will be far more important. Should he signals more stimulus, NZD/USD may have an extra reason to stay firm beyond 0.7200.

Technical analysis

Although sustained bounce off 0.7100 precedes an upside break of a two-week-old falling trend line to back the NZD/USD bulls, 50-day SMA near 0.7215 tests the quote’s immediate rise.