- Uncertainty surrounding the United States (US) – China trade conflict weighs on the NZD.
- US Dollar Index stays above the 99 handle at the start of the week.
- Mid-tier data releases from the US are unlikely to trigger a significant market reaction.
The NZD/USD pair closed the previous week with small recovery gains and started the new week under renewed selling pressure. After touching its lowest level since September of 2015 at 0.6250 earlier in the day, the pair has gone into a consolidation phase and was last seen trading at 0.6265, erasing 0.48% on a daily basis.
Markets turn risk-averse amid trade uncertainty
Although a US official denied last week’s reports claiming that the US was planning to limit portfolio flows into China and to delist Chinese companies from US stock markets, the antipodeans struggled to find demand on Monday. Commenting on the issue, China’s Foreign Minister argued that the “China-US decoupling” would harm both sides and cause instability in international markets.
Earlier in the day, the data published from New Zealand revealed Building Permits rose 0.8% on a monthly basis in August but was largely ignored by the market participants.
In the American session, the ISM Chicago’s Purchasing Managers’ Index (PMI) and the Federal Reserve Bank of Dallas’ Manufacturing Business Index will be looked upon for fresh impetus. Ahead of this data, the US Dollar Index is preserving last week’s gains near 99.20.
During the Asian trading hours on Tuesday, the New Zealand Institute of Economic Research will release the Business Confidence data for the third quarter.
Technical levels to watch for
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