- China’s central bank announces a 0.5% cut to the RRR.
- NZD/USD remains on track to snap seven-week losing streak.
- US Dollar Index moves sideways near 98.50 as focus shifts to NFP data.
The NZD/USD pair pushed higher in the last hour and rose above the 0.64 mark for the first time since August 21 boosted by renewed optimism about Chinese economic growth picking up momentum. As of writing, the pair was trading at 0.6415, adding 0.65% on a daily basis. Unless it loses more than 200 pips in the remainder of the day, the pair will snap its seven-week losing streak when markets close for the weekend.
Antipodeans gain traction on PBOC announcement
This week’s data from China revealed that the economic activity in the country’s service sector expanded at a more robust pace than expected in August. Today, China’s central bank (PBOC) announced a 0.5% cut to the Reserve Requirement Ratio with an aim to inject around 900 billion yuan worth of liquidity into the economy and revived optimism about the recovery picking up momentum toward the end of the year and allowed antipodeans to find demand.
Additionally, easing concerns over a protracted US-China trade conflict after China’s Commerce Ministry yesterday said that they have agreed to hold the next round of face-to-face trade talks next month in Washington provided an additional boost to trade-sensitive currencies such as the NZD and the AUD.
Meanwhile, the Greenback stays relatively quiet as investors refrain from making any large bets ahead of today’s key macroeconomic data releases from the US.
Previewing today’s Nonfarm Payrolls report, “We expect payrolls to trend modestly lower to 145k in August (mkt 160k), following the 164k print in the previous month. That said, the strong increase in services-sector employment in the August ADP report raises the odds of an upside surprise,” said TD Securities analysts. Ahead of the data, the US Dollar Index is moving sideways near the 98.50 handle.
US NFP Preview: 8 Major Banks expectations from August payrolls report
Technical levels to consider
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