- The NZD / USD brings offers near the three-month high around 0.6450.
- The latest comments from US President Donald Trump have given fresh impetus to the risk tone of the market.
- The New Zealand ANZ commodity price index in immediate perspective, the ECB and US unemployment claims will be key thereafter.
The NZD / USD extended the decline in the opening of the Asian session from 0.6418 to 0.6430 in the early hours of Thursday. The kiwi pair recently encouraged a broad sense of risk, as well as the weakness of the US dollar, while probing for the high of March 2020. The pair’s latest catalyst could be comments from US President Donald Trump.
In his interview with Sean Spicer of Newsmax, U.S. President Trump reiterated his calls not to use harsh military power to punish the rioters. The Republican leader also said he did not think of sanctions against the Chinese president XI Jinping for the question of Hong Kong. In addition, the optimist further stated that the economy would be even better with a little time.
Following this news, the markets benefited from an additional impetus to prolong the optimism of the previous day. It should be mentioned that the withdrawal of the President from using the military to stop the protests and the hopes of the economy were the main catalysts for optimistic market performance on Wednesday. The riskiest assets also supported calls for stimulus from global central banks and the weak dollar.
That said, the mood for risk helped yields on 10-year US Treasuries exceed 0.75% while encouraging Wall Street to post notable gains by the end of Wednesday’s session. Recently, the S&P 500 Futures is gaining momentum with moderate profits of around 3,120.
Looking ahead, the New Zealand commodity price index, expected -1.6% from -1.1% previously, could provide immediate guidance for the pair of kiwis before the busy European / American session. While the ECB’s monetary policy meeting, followed by Governor Christine Lagarde’s press conference, will be crucial to watch, US unemployment claims will also be important for traders in the pair to follow. If the ECB manages to maintain its bearish bias while announcing an expected further stimulus, the risk mood in the market will gain strength, which could propel the NZD / USD further north.
Unless falling below the 200-day SMA level near 0.6315, the NZD / USD is preparing for a February peak close to 0.6500. However, the March high around 0.6450 seems to offer immediate resistance to the pair.