- NZD/USD picks the bids after China’s Industrial Production, Retail Sales grew in November.
- RBNZ struck dovish tone earlier in Asia, cites economic risk.
- New Zealand’s Q4 Westpac Consumer Sentiment grew past-95.1.
- Risk catalysts keep the spotlight with stimulus, virus be the keywords.
NZD/USD extends corrective pullback from the intraday low of 0.7070, currently around 0.7082, during the early Tuesday. The pair recently benefited from China’s November month activity numbers. The same help the kiwi buyers to battle the dovish comments from the Reserve Bank of New Zealand (RBNZ), published before a few hours.
China’s Industrial Production matches the 7.0% forecast while Retail Sales eases below 5.2% to 5.0% YoY. Even so, both these figures cross their respective previous readings of 6.9% and 4.3%.
Read: China’s Nov data dump: Retail Sales miss estimates with 5.0%, Industrial Production steadies at 2.6%
During the initial Asian session, New Zealand’s (NZ) fourth quarter (Q4) Westpac Consumer Survey crossed 95.10 prior with 106.00 figures.
However, the bulls couldn’t cheer the early-day economics as the RBNZ struck a dovish tone while citing economic fears and risks to the downside.
Read: RBNZ: Monitoring asset prices as part of on-going assessment of financial system and financial market developments
It should, however, be noted that the bears remain chained as market sentiment improved amid hopes of further stimulus from the US. The reason could be traced from US President-elect Joe Biden’s ability to secure the needed 270 votes after winning the battle versus President Donald Trump in the Electoral College. Also increasing the odds of the much-awaited stimulus are recently optimistic comments from US House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin.
Read: Pelosi reiterated democratic concerns about liability provisions in covid relief bill
On the contrary, fears of the fresh variant of the coronavirus (COVID-19), as signaled by the UK’s Health Minister Matt Hancock, join increasing numbers of local lockdowns and the western tussles with China.
Against this backdrop, S&P 500 Futures rise 0.15% whereas stocks in New Zealand rise 0.55% by press time.
With no major data left for publishing during today’s Asian session. NZD/USD traders will keep eyes on the risk catalysts like virus updates and stimulus headlines for fresh impetus. Though, a major attention will be given to Wednesday’s Fed decision and Thursday’s New Zealand Q4 GDP, expected +13.5% versus -12.2% QoQ prior.
Technical analysis
As the ascending trend line from the early November, at 0.7050 now, probes short-term NZD/USD sellers, the bulls are likely to keep 0.7100 on their watch-list.
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