- NZD/USD struggles to keep bounces off 0.6577, the lowest since September 30.
- Risk aversion extends amid chatters over Trump’s stoppage of the US stimulus talks.
- Brexit and virus woes are additional challenges to market sentiment that weigh on Antipodeans.
- No major data/events to watch, risk catalysts are the key ahead of FOMC miutes.
NZD/USD witnesses a corrective pullback from 0.6577 to 0.6585 during the initial Asian session on Wednesday. The pair dropped heavily on Tuesday after trading environments worsened following US President Donald Trump’s rejection of the bipartisan stimulus deal talks.
Congress members jostle over stimulus, virus regains market attention…
Trump’s ‘NO’ to further negotiations over the coronavirus (COVID-19) aid package with the opposition Democratic party got back-up from the House leader Mitch McConnel although Nancy Pelosi said they were close to the deal when President called off the talks. Replying to the same, US President Trump tweeted, “Crazy Nancy Pelosi and the Radical Left Democrats were just playing “games” with the desperately needed Workers Stimulus Payments. They just wanted to take care of Democrat failed, high crime, Cities and States. They were never in it to help the workers, and they never will be!”
On the other hand, the University of Washington predicts, as per the Xinhua report, over 360,000 deaths due to the COVID-19 in the US by January 1, 2021. Virus woes also gain the attention of the BOJ Governor Kuroda who said that full global economic recovery is further down the road. Further, UK PM Boris Johnson is also juggling with a tough decision of lockdowns as pandemic numbers in northern England keep rising. Additionally, global market players doubt the White House Leader Trump’s health recovery after he gasped during the video while trying to prove the feeling of “20-year younger”.
Against this backdrop, S&P 500 Futures drop 0.25% intraday whereas Japan’s Nikkei 225 opens with over half a percent of downside gap as we write.
Looking forward, a light calendar in Asia will keep the NZD/USD traders directed towards the risk headlines for fresh impetus ahead of the US session when the FOMC minutes will gain market attention. In his recent speech, the Fed Chair Jerome Powell highlighted the need for further stimulus. Hence, further clues relating to the same in the minutes will be searched by the Kiwi bears.
Technical analysis
Repeated failures to stay past-0.6660 drag NZD/USD towards an ascending trend line from May 15, at 0.6565 now.
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