- NZD is the strongest of all G10 currencies so far this Monday.
- But looks vulnerable amid weak fundamentals ahead of FOMC and NZ Q1 GDP
Amid broad-based US dollar consolidation near ten-day tops of 97.60, the recovery in the NZD/USD pair is seeing some fresh signs of life above the 0.65 handle. At the press time, the spot is seen breaking higher from its consolidative mode around 0.6510 levels and prints fresh daily tops at 0.6514.
The Kiwi appears to draw support so far this Monday from a bout of profit-taking ahead of the key event risks due later this week, the FOMC policy decision and New Zealand (NZ) Q1 GDP data release.
Despite the ongoing recovery, the risks remain skewed to the downside in the pair, as the recent downbeat NZ manufacturing PMI data continues to weigh while expectations of a poor NZ Q1 GDP report could also keep any upside attempts short-lived. The recent streak of dismal NZ fundamentals continues to underscore increased chances of another rate cut by the Reserve Bank of New Zealand (RBNZ) next month.
Meanwhile, the looming US-China trade war combined with the recent weakness in oil prices also undermine the sentiment around the Chinese proxy, the Kiwi. China is New Zealand’s top export market.
In the day ahead, the price will remain at the mercy of the risk trend and USD dynamics amid a lack of first-tier US economic news and ahead of NZ Westpac Consumer Sentiment data due early Tuesday.
NZD/USD Levels to watch
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