NZD/USD: Little changed around 0.6600, all eyes on RBNZ
|- Global trade tensions weigh over commodity-linked currencies.
- RBNZ could follow RBA’s foot-steps.
NZD/USD trades little changed around 0.6600 at the start of the Asian session on Wednesday as most of the Kiwi traders await RBNZ’s rate decision.
The quote remained on the back foot yesterday as worries concerning the trade deal between the US and China weigh over the Reserve Bank of Australia’s (RBA) surprise hold policy.
As per the latest market news, the US and Chinese lawmakers are to discuss the trade deal in Washington starting from Thursday but little progress is being expected due to the US President Donald Trump’s threat to levy fresh tariffs on Chinese goods.
Also, latest data from New Zealand on global dairy trade (GDT) price index was also not up to the mark despite beating -1.1% forecast to +0.4% as prices of whole milk powder (WMP) weakened for the third consecutive time.
Traders now await monetary policy announcement from the Reserve Bank of New Zealand (RBNZ), up at 02:00 GMT. The event has additional importance after yesterday’s no rate cut from the
Reserve Bank of Australia (RBA) and also because quarterly rate statement and press conference by Governor Adrian Orr is to accompany the cash rate announcement and monetary policy statement.
Majority of top-tier forecasters, including TD Securities, Westpac, and ANZ, expect the RBNZ to follow RBA’s foot-steps and hold its present monetary policy unchanged with a downward bias for future rate alteration.
It should also be noted that China’s monthly trade balance data is another catalyst, up generally around 02:00 GMT, can also add news burden on the market players. The headline trade balance for April may rise to $35.00 billion from $32.67 billion registered during last month.
Technical Analysis
The six-week-old descending trend-line and an area comprising lows marked in January and April limit the Kiwi moves between 0.6650 and 0.6590/80 with either side breaks opening the door for 0.6685 and 0.6510 levels respectively.
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