- NZD/USD pokes intraday high following the upbeat NZ budget speech.
- New Zealand budget forecasts improvement in economics, fiscal conditions going forward.
- Market sentiment dwindles as tapering, trade fears battle vaccine hopes, stimulus expectations.
- Risk headlines remain the key, US data can also provide fresh impulse.
NZD/USD picks up bids to 0.7170, up 0.05%, after New Zealand Finance Minister Grant Robertson unveiled the annual 2021 budget early Thursday. In doing so, the quote struggles to overcome the previous day’s losses but risk aversion mood tests the pair’s immediate upside.
New Zealand (NZ) Finance Minister Robertson said, “Long-term effects of pandemic not as severe as previously thought” while releasing the annual budget for 2021. The key financial statement upwardly revised the GDP forecast from its Half Year Economic Forecast Update (HYEFU) while also expecting a gradual reduction in the fiscal deficit.
Read: NZ Budget: Sees 2021 GDP at +2.9% vs. HYEFU +1.5%
Other than the New Zealand budget updates, no rate change from the People’s Bank of China (PBOC), as widely expected, joins mixed Aussie jobs report to direct short-term NZD/USD moves. Also, the market’s cautious mood after the previous day’s FOMC-led pessimism offers additional pressure on the kiwi pair.
Although the Fed’s signals of talking the tapering and actual action are two different things, global markets turned risk-off following the FOMC Minutes, published Wednesday. The downbeat sentiment gained extra support from the virus woes in Asia and trade tussles between Australia and China. However, gradually picking up vaccinations keeps the hopes of faster economic recovery and tames the market bears. Also on the same line are the escalating hopes of the US fiscal stimulus as American policymakers jostle over final details of the infrastructure spending.
Amid these plays, S&P 500 Futures print mild losses and the US 10-year Treasury yields drop two basis points (bps) to 1.66%, after rising to 1.69% the previous day. It’s worth mentioning that the US dollar index (DXY) fails to keep Wednesday’s bounce-off February low by press time.
Given the mixed catalysts, NZD/USD traders should pay attention to the US traders’ reaction to the FOMC minutes and latest developments concerning the coronavirus (COVID-19) and the government relief packages. Also, Weekly Jobless Claims and Philadelphia Fed Manufacturing Survey data for May could offer extra details to better judge the pair moves. Above all, US dollar moves will be the key for the kiwi pair traders.
Technical analysis
Unless bouncing back beyond 100-day SMA, currently around 0.7180, NZD/USD sellers can target a 12-day-old support line near 0.7145 amid bearish MACD. However, any further weakness will have to break the 50-day SMA level of 0.7140 on a daily closing basis to confirm the seller’s entry.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD breaks below 1.1000 on stellar NFP
The buying bias in the Greenback gathers extra pace on Friday after the US economy created far more jobs than initially estimated in September, dragging EUR/USD to the area of new lows near 1.0950.
GBP/USD breaches 1.3100 after encouraging US Payrolls
The continuation of the uptrend in the US Dollar motivates GBP/USD to accelerates its losses and breaches 1.3100 the figure in the wake of the release of US NFP.
Gold rebounds from daily lows and flirts with $2,670
Following a post-NFP dip to the $2,640 region, Gold prices now embarks on an acceptable rebound and retest the area of $2,670 per ounce troy despite the marked advance in the US Dollar and rising US yields across the board.
US Payrolls surge in September, as 50bp rate cut ruled out
US payrolls data surprised on the upside in September, rising by 254k, smashing expectations of a 150k rise. The unemployment rate fell to 4.1% from 4.2%, average hourly earnings increased to a 4% YoY rate and there was a 72k upwards revision to the previous two months’ payrolls numbers.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.