US labour productivity data did little to impact sentiment towards the dollar or shift NZD/USD out of its sub-07050 range. NZD is likely to continue to trade likely as a function of global sentiment ahead of Manufacturing Sales Volume data at 21:45GMT. NZD/USD continues to trade within the approximate 0.7020s-0.7050s range that has been in play since the start of Tuesday Asia trade, in fitting with a subdued feel to broader FX market trade. The pair currently trades marginally higher by just under 10 pips of around 0.1%. NZD/USD focused on macro themes NZD/USD has traded as a function of USD flows thus far this Tuesday, rallying as highs as the 0.7050s during the Asia session and dropping as low as the 0.7020s by the late European morning session, before recovering back towards 0.7050 more recently. This undulation has occurred almost perfectly in line with the Dollar Index (DXY) ranging between the 90.70s and 91.00s. USD was little moved by US non-farm labour productivity growth in Q3, which disappointed with QoQ growth of just 4.6% (expectations were 4.9% growth) and Unit Labour Costs, which were down 6.6% during Q3 QoQ versus expectations for an 8.9% drop. Amid a lack of fresh New Zealand related fundamental developments thus far on the week (things have been quiet on the politic and RBNZ fronts and there have been no important data releases yet this week), NZD has traded broadly in line with wider risk appetite. However, Manufacturing Sales Volume data for Q3, which will show how well the country’s manufacturing sector recovered from the 12.2% drop in sales volumes seen in Q2 as a result of global lockdowns due to the Covid-19 outbreak, is likely to garner some attention. But given that manufacturing only accounts for 12.2% of the New Zealand economy (according to the New Zealand Treasury), the read-across to the economy’s performance is likely to be somewhat limited, thus NZD volatility is unlikely to be particularly large. In the meantime, NZD and the NZD/USD pair is likely to continue to trade as a function of broader risk appetite. The major themes in focus at the moment are… 1) US fiscal stimulus talks – Focus is on whether Congress can pass a stopgap bill on Wednesday in order to push back the date of government shutdown by one week and in doing so allow more time for negotiations on the next government funding bill, as well as (more importantly) another Covid-19 stimulus package. The tone of talks has improved after a bipartisan group of Senators unveiled a $900B package that both the Democrats and Republicans are acknowledging is a good basis for negotiations, although no deal has been reached yet. Any signs that a deal is close to being reached this week would boost risk appetite and NZD/USD. 2) Vaccine news – Pfizer/BioNtech are hoping to see their Covid-19 vaccine approved in the US before the end of the week, news of which could boost risk appetite and also NZD/USD. Rejection of the vaccine by the FDA (seen as very unlikely at this point) would of course have the opposite impact. 3) Other factors such as Brexit talks (a GBP sell-off if talks collapse could hurt sentiment and NZD), the ECB meeting on Thursday and the EU council summit will also be closely watched by FX markets. Market friendly outcomes (Brexit deal reached, dovish ECB and EU27 Leaders agreeing a deal no the recovery fund) could boost the likes of NZD/USD. NZD/USD in short-term downtrend but remains supported above 0.7000 Since pulling back from the 0.7100 level, NZD/USD has formed a bearish trend-channel, but has largely remained supported above the psychological 0.7000 level. If a turn for the worse in risk appetite was to spur a break to the south of this important 0.7000 level, the door could be opened for a move to the south and a test of the 21-day moving average at 0.6959. Should the current downtrend break, a move back towards Monday’s highs at 0.7065 and then into the 0.7100 would be on the cards. NZD/USD four hour chart FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next EUR/CHF drops below 1.0770 to one-month lows FX Street 2 years US labour productivity data did little to impact sentiment towards the dollar or shift NZD/USD out of its sub-07050 range. NZD is likely to continue to trade likely as a function of global sentiment ahead of Manufacturing Sales Volume data at 21:45GMT. NZD/USD continues to trade within the approximate 0.7020s-0.7050s range that has been in play since the start of Tuesday Asia trade, in fitting with a subdued feel to broader FX market trade. The pair currently trades marginally higher by just under 10 pips of around 0.1%. 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