fxs_header_sponsor_anchor

News

NZD/USD pares losses below 0.7300 after China CPI, PPI

  • NZD/USD extends bounce off intraday low, stays pressure for the second consecutive day.
  • China CPI lagged behind upbeat expectations but PPI jumped to the highest since October 2017.
  • Market sentiment dwindles amid reflation fears, stimulus hopes and a light macro feed.

NZD/USD trims intraday losses to 0.21% while picking up bids around 0.7265 during early Tuesday. The kiwi pair recently took clues from China’s headlines inflation figures for April but the risk-off mood keeps the quote pressured for the second consecutive day.

China’s Consumer Price Index (CPI) stepped back from -0.2% forecast to -0.3% MoM, well above -0.5% prior whereas the yearly CPI eased to +0.9% numbers versus +1.0% market consensus but crossing +0.4% previous readouts. However, the Producer Price Index (PPI) rose past 4.4% prior and 6.6% market expectations to the highest since October 2017 as flashing 6.8% numbers.

Read: China CPI 0.9% YoY vs expected 1.0% / PPI 6.8% YoY vs the expected 6.5%

Earlier in the day, New Zealand’s Electronic Card Retail Sales, covering 68% of core Retail Sales of NZ, jumped 108.7% YoY in April versus 5.1% prior. However, the NZD/USD bears take clues from risk catalysts while printing intraday losses.

Despite Friday’s US NFP debacle and the Federal Reserve (Fed) officials’ rejection of tapering, markets aren’t convinced as the flow of stimulus keeps signaling upside risk to inflation, which in turn may force the Fed to dial back some of the easy money measures. As a result, this Wednesday’s US CPI for April becomes the key to watch.

It’s worth mentioning that the US Republican Party members have recently eased their opposition to President Joe Biden’s heavy stimulus, easing the path for more relief packages.

Elsewhere, the coronavirus (COVID-19) woes in Asia remain firm but the vaccine developments help battle the bears.

Moving on, risk-related headlines become the key for near-term NZD/USD direction while Wednesday’s US CPI, expected 3.6% versus 2.6% YoY, will be the key.

Technical analysis

Although 0.7305-10 guards short-term NZD/USD upside, an ascending trend line from early April, around 0.7150, becomes the key support to watch during the pair’s further weakness.

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.


RELATED CONTENT

Loading ...



Copyright © 2024 FOREXSTREET S.L., All rights reserved.