- NZD/USD is solidly bid for the fifth day straight and is currently trading at a 12-day high.
- The American dollar is on the defensive, courtesy of the rising odds of the US-China breakthrough trade deal and due to rising evidence of the US economic slowdown.
NZD/USD is currently trading at 0.6687, the highest level since Feb. 6.
The currency pair closed higher for the fourth consecutive day on Friday. That was the first four-day winning streak since mid-November.
Further, it could end the day on a positive note, as the American dollar is being offered on the rising odds of a US-China trade deal and the resulting risk-on action in the equities. After all, the greenback was the preferred safe haven in 2018.
Also supporting the bullish case is the growing evidence of a deeper slowdown in the US economy. Both inflation and the retail sales – two of the most important measures for the Fed – printed below expectations last week, validating the central bank’s recent dovish turn.
Major investment banks like JP Morgan have also cut their Fed rate hike forecast to a single increase in 2019 and 2020.
The Kiwi, however, may not find acceptance above 0.6894 (78.6% Fib R of Feb. 1 high/Feb. 2 high) if the trade optimism fades.