NZD/USD consolidates recent losses towards regaining 0.7000 ahead of China PMI

• NZD/USD refreshes intraday top while extending Tuesday’s recovery moves from 0.6972.
• New Zealand’s ANZ Business Confidence, Activity Outlook both came in weaker for March.
• Risk-off mood fades ahead of the key China activity figures, US infrastructure spending announcements.

NZD/USD takes the bids near 0.6992, up 0.13% intraday, amid Wednesday’s Asian session. In doing so, the kiwi pair differs from the previous day’s downbeat performance as risk-aversion halts ahead of the key data/events. It should be noted that the quote ignores downbeat data from the Australia and New Zealand Banking Group (ANZ) while printing mild intraday gains by the press time.

Final readings of New Zealand’s ANZ Business Confidence and Activity Outlook slipped below the initial forecasts and prior read-outs in the latest announcement showing -4.0 and 16.6% figures respectively. While NZD/USD paused around intraday high following the data, the pair holds the day’s gains amid a recovery in sentiment off-late.

Hopes of a $3.0 trillion US infrastructure package and faster vaccinations in the West are likely behind the latest risk-on wave. Also favoring the mood could be increasing odds of the US-Iran talks over the nuclear deal.

Alternatively, China’s tussles with the US and the UK join the United Nation’s inaction over North Korea’s missile tests to weigh on sentiment. Also, allegations that Russia stole thousands of the US State Department data and the coronavirus (COVID-19) woes in the European Union (EU) and Australia seem to have magnified the risk-off mood.

Against this backdrop, S&P 500 Futures wavers around 3,950 even as the Wall Street benchmarked flashed negative daily closing and the US 10-year Treasury yield jumped to the highest since January 2020 the previous day.

Looking forward, China’s March month NBS Manufacturing PMI, expected 51.2 versus 50.6 prior, will be the immediate catalysts to watch for the NZD/USD moves. However, major attention will be given to US President Joe Biden’s infrastructure plan announcement on 16:20 GMT.

Technical analysis

Unless printing a successful run-up past-0.7100, comprising the early month lows, NZD/USD stays on the bear’s radar.