- The US-China trade dispute continues to drag commodity-linked currencies down.
- The US Dollar (USD) remains up due to lack of downbeat fundamentals.
- Dairy giant at home also plays a negative tune.
NZD/USD trades near a shade weaker to 0.6500, fresh 2019 low, at the start of the Asian session on Thursday. The Kiwi has been on its downward trajectory off-late as the US-China trade spat gets worsen day-by-day while the US Dollar (USD) is gaining some ground against the majority of its counterparts on upbeat fundamentals. Downbeat news reports from home could also be considered as reasons for the Kiwi’s latest declines.
With the US planning to blacklist nearly five Chinese surveillance firms and the Treasury Secretary Steven Mnuchin turning the hopes of Beijing visit down, not to forget strong comments challenging the US actions by China, global traders expect no solution to the trade differences between the world’s two largest economies.
With China being the world’s largest commodity user, any negative news concerning the same could have an unwelcome impact on Antipodeans.
On the other hand, the greenback gained recently after the FOMC minutes showed that most policymakers hold their “patient” approach considering moderate growth and muted inflation.
At the domestic front, New Zealand’s dairy giant Fonterra recently lowered its milk price expected range and earnings per share while spotting slower than expected recovery in the key markets and challenges to largest customer Australia.
Additionally, New Zealand’s Finance Minister Grant Robertson was also on wires ahead of budget presentation. He said the country will target debt of 15 to 25% of GDP from FY 2021/22 in order to avail more flexibility by the government.
Looking forward, the economic calendar is likely to remain silent with weekly employment numbers and purchasing manager index (PMI) from the US likely entertaining watchers during the later part of the day.
Given the quote’s slip under 0.6500, October 2018 bottom near 0.6425 gains sellers’ attention with 0.6465 likely being an intermediate halt. Should prices slip under 0.6425, the year 2016 bottom around 0.6350 becomes the key to observe.
On the upside, 0.6515 and a descending trend-line from March 26 at 0.6535 could please counter-trend traders, a break of which can recall 0.6580 back to the chart.