NZD/USD consolidates last week’s gains below mid-0.64s

• Manufacturing sales in New Zealand contracted in the second quarter.  
• US Dollar Index fluctuates in tight range above 98.
• US Treasury Secretary says they will enter a trade deal with China if they get a “good deal.”

The NZD/USD pair snapped its six-week losing streak last week and gained nearly 130 pips but struggled to stretch higher on Monday as markets have gone into a consolidation phase amid a lack of significant macroeconomic drivers. As of writing, the pair was up 0.2% on the day at 0.6440.

Quiet start to the week

Although the disappointing trade balance data from China over the weekend put the antipodeans under modest selling pressure at the start of the week, reports of China planning to introduce additional cuts later this year to the  reserve requirement ratio (RRR) allowed the NZD gather strength during the European trading hours. Additionally, the data published from New Zealand showed that the manufacturing sales in the second quarter contracted by 2.7% following the 1.3% expansion witnessed in the previous week.

Meanwhile, during an interview with Fox Business earlier today, US Treasury Secretary Steven Mnuchin said that they already had a conceptual agreement with China on enforcement areas and added that  they will enter a trade deal with China if they get a “good deal.”

On the other hand, the ongoing recovery in US Treasury bonds help the Greenback find demand on Monday and make it difficult for the pair to gain traction. At the moment, the US Dollar Index is up 0.25% on the day at 98.27. Later this week, the Consumer Price Index (CPI) data from the US will be looked upon for fresh impetus. During the Asian session on Tuesday,  

Technical levels to watch for