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  • USD strength, weak NZ/ China macro data weigh on Kiwi.
  • Next of relevance: US macro data, US-China trade developments.

Having met resistances around 0.6300 on multiple occasion in early trades, the NZD/USD pair witnessed aggressive selling and hit fresh session lows at 0.6283 amid broad US dollar strength and dismal New Zealand fundamentals.

Kiwi unfazed by US-China trade optimism?

The spot trades with mild losses so far this Friday, unable to benefit from the ongoing positive developments on the US-China trade front, as both teams are set to resume trade talks on Oct 10th and 11th in Washington.

The bearish sentiment around the Kiwi is mainly due to the unabated US dollar buying across the board, as dollar funding shortage accelerated, with both overnight and term repo oversubscribed. The US dollar index sits at three-week highs of 99.27, up 0.10% on the day.

Further, the Antipodeans also came under pressure after the ANZ Consumer Confidence for September dropped to a four-year low, down 3.6% m/m to 113.9, adding to New Zealand’s worsening economic picture. Meanwhile, a sharp drop in the Chinese industrial profits also collaborates to the weakness in the Chinese proxy, the NZD.

Om Thursday, the Kiwi rallied as much as 0.6327 on Reserve Bank of New Zealand (RBNZ) Governor Orr’s upbeat remarks on the economy and monetary policy.  RBNZ’s  Orr: Unlikely to need ‘unconventional’ monetary policy tools. Also, in-line with estimate US Q2 final GDP revision also underpinned Thursday’s rally in NZD/USD.

Looking ahead, the pair will continue to get influenced by the risk trends and more so the USD dynamics, with all eyes on the US Durable Goods and Consumer Sentiment data for fresh trading impetus.

NZD/USD Technical levels to consider