NZD/USD seesaws around 0.6540 as RBNZ’s financial stability report flashed mixed signals
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NZD/USD seesaws around 0.6540 as RBNZ’s financial stability report flashed mixed signals

  • The risks to the financial system being identified.
  • LVR remained unchanged with fewer signals to any alteration.
  • RBNZ’s Orr’s speech will be in the spotlight for now.

The NZD/USD pair seesaws near the 0.6540 at the start of Wednesday’s Asian trading session. The quote initially rose on the LVR statements from the FSR but then concentrated more on the financial system risk to decline later.

The RBNZ’s six-monthly financial stability report (FSR) conveyed the risk to the financial system and also a need for some insurers and non-bank deposit takers to improve their capital buffer.

Investors gave little reaction to New Zealand central bank refrained from signaling any changed to (loan to value ratio) LVR settings. It also said that further easing in LVRs is subject to continuing subdued credit and house price growth.

The US markets opened on Tuesday after a Memorial Day Holiday on Monday and responded to the EU election results, not to forget soft economic data, with the risk-off moves being in support of the greenback.

As a result, the New Zealand Dollar (NZD) had to witness another negative daily closing. Additionally, trade tension between the US and China continues to loom over the Antipodeans.

With the bi-annual financial stability report already out, traders may now wait for the speech from the Reserve Bank of New Zealand’s (RBNZ) Governor, Adrian Orr, for additional details to determine near-term trade direction.

Technical Analysis

With another failure to cross 0.6560, the quote is more likely to revisit 0.6515 and 0.6480 rest-points with October 2018 low surrounding 0.6425 and 0.6400 being follow-on supports to watch.

However, pair’s sustained trading beyond 0.6560 may help it rise beyond April month low of 0.6585 and aim for 0.6610 and 0.6660 numbers to the north.

FX Street

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