NZD/USD: Mildly positive above 0.6250 on New Zealand data, shift in trade sentiment
- NZD/USD bounces off 0.6255 following the latest swing the US dollar, risk-tone.
- New Zealand Electronic Card Retail Sales surprised to the upside in February.
- Absence of US President Trump’s ‘major’ announcement, coronavirus updates weigh on the risk-tone.
- The COVID-19 updates remain as the key to follow for near-term direction.
With the fresh challenges to Tuesday’s broad risk rebound crossing wires, not to forget New Zealand data, NZD/USD recovers to 0.6275 amid the initial Asian session on Wednesday.
The pair recently benefitted from New Zealand Electronic Card Retail Sales data from February that surprised markets with upbeat releases. Not only the MoM figures of +0.6% versus +0.3% forecast and downwardly revised -0.2% prior but a huge 8.6% rise on the yearly basis compared to 4.1% expected and 4.2% previous also please the kiwi buyers off-late.
Also contributing to the pair’s bounce could be the US dollar’s latest pullback after marking noticeable gains the previous day. The greenback might have taken clues from the absence of any strong details of President Donald Trump’s earlier signal to ‘major’ economic response to coronavirus (COVID-19).
It should also be noted that the rising death toll in the US, to 24 now, join the outbreak in the UK and Europe to offer additional burden on the risk tone. As a result, the US equity futures fail to extend the Wall Street gains marked by the end of Tuesday.
Moving on, investors will keep eyes on the updates from RBNZ as the central bank recently (again) turned down the odds of any immediate reaction to the pandemic. Analysts at the Australia and New Zealand Banking Group (ANZ) consider it as positive for the kiwi while saying, “We remain of the view that the Kiwi will weaken into this global shock, but with the RBNZ outwardly confident time’s on its side, and questioning veracity of cuts at this juncture (ahead of the planned fiscal response), the NZD’s tenure on borrowed time looks to have gotten an extension.”
Additionally, coronavirus updates and any surprise announcements from the US government to tame the negative implications of the disease could also entertain the traders ahead of the US CPI data.
Technical Analysis
Sustained trading below the yearly trend line, at 0.6400 now, directs the pair down towards revisiting the last week's low near 0.6200.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
