- The NZD / USD is holding the 0.6544-52 range intact after scoring the biggest gains in a week.
- New Zealand’s July trade balance fell from $ 1.13 billion to $ -0.12 billion.
- The optimism of the Sino-US trade deals favors the bulls to counter virus evils.
The NZD / USD crosses to 0.6550 in the first Asian session on Wednesday. The pair of kiwis have recently paid a little attention to the July trade figures from New Zealand. The reason could be attributed to the markets waiting for the key of the week, namely the Jackson Hole Symposium, as well as the lack of new information on the risk front.
Data matters less than risk catalysts, for now …
New Zealand’s trade balance fell from $ 475 million MoM to $ 282 million in July. Details suggest that imports increased by more than $ 4.61 billion to $ 4.63 billion, but exports fell from $ 5.08 billion to $ 4,912 billion during the period shown.
Despite generally sluggish data, the Kiwi pair did not respond as traders await further impetus to extend yesterday’s bullish performance. The pair’s biggest advantage since Aug. 18 took cues from the US-China trade deal dialogue that suggested “constructive” talks and optimism ahead.
The resulting positive mood could be checked in the bullish performance of Wall Street, with record-setting S&P 500 and Nasdaq closings, as well as the 4.2 basis point (bps) gains in US Treasury yields to 10 years. However, the S&P 500 Futures halted its last run which pushed the risk barometer to an all-time high near 3448 on Tuesday.
It should be noted that the challenges of the U.S. push for the coronavirus (COVID-19) vaccine / treatment and home virus numbers are factors limiting the pair’s bullish moves. The sense of caution in the market ahead of central bankers’ speech at the Jackson Hole Symposium is also called into question.
Given the latest moves in the NZD / USD pair, the Australian and New Zealand Banking Group (ANZ) said:
The USD DXY neither bounces nor falls, and is more likely to just walk ahead of tomorrow night Fed Chairman (NZT) Powell’s speech on revising the Fed’s monetary policy framework, including the result could have important consequences for the currency markets. We all know where the RBNZ’s thinking is, and it presents headwinds for the Kiwi.
Meanwhile, today’s US durable goods orders, expected at 4.3% vs. 7.6% previously, may offer intermediate moves.
Unless you successfully cross a 50-day SMA level around 0.6560, NZD / USD buyers are likely to be convinced. As a result, the monthly low near 0.6490 / 85 and a downtrend line from August 12th, at 0.6460 now, remains in the eyes of traders.