NZD/USD recovers to 0.6420, stays in weekly range amid protracted trade uncertainty

• Chinese President Xi says he is not afraid of a trade war with US.
• US could reportedly delay December tariff hike if there is no deal.
• US Dollar Index moves sideways near 98 ahead of PMI data.

The NZD/USD pair is having a difficult time making a decisive move despite the modest recovery witnessed on Friday. As of writing, the pair is trading at 0.6417, adding 0.25% on a daily basis.

Investors continue to assess US-China trade developments

The lack of clarity on the completion of phase one of the United States (US)-China trade deal ahead of the scheduled tariff hikes on December 15th seems to be forcing investors to refrain from making large bets.  

The South China Morning Post (SCMP) on Thursday claimed that the White House could delay the tariff increase on Chinese imports even if a deal is not finalized but there is  good progress in the next round of face-to-face talks. During the Asian trading hours on Friday, Chinese President Xi Jinping reiterated that they want to work out phase one fo the trade deal but added that he is not afraid of a trade war with the US. “When necessary we will fight back, but we have been working actively to try to not have a trade war,” Xi added.

In the meantime, the US Dollar Index is moving sideways near the 98 mark, causing the pair to remain stuck in its daily range. During the American session, the IHS Markit will publish the preliminary Manufacturing and Services Purchasing Managers’ Index (PMI) data for November. Markets are likely to react to a big deviation in the Manufacturing PMI reading, which is expected to edge up to 51.5  from 51.3 in October.  

Technical levels to consider