NZD/USD ticks lower after weaker Chinese PMIs, remains below mid-0.5800s – Crypto News – Crypto News
Connect with us
Breaks 1.1000 key support on RBNZ rate hike Breaks 1.1000 key support on RBNZ rate hike

others

NZD/USD ticks lower after weaker Chinese PMIs, remains below mid-0.5800s – Crypto News

Published

2 years ago

on

Share:

  • A combination of factors exerts some pressure on NZD/USD during the Asian session.
  • Hawkish Fed expectations and Elevated US bond yields help revive the USD demand.
  • The disappointing Chinese PMIs further contribute to the modest intraday downtick.

The NZD/USD pair ticks lower during the Asian session on Tuesday and erodes a part of the previous day’s positive move, though lacks follow-through. Spot prices remain on the defensive below mid-0.5800s and react little to the disappointing release of Chinese PMI prints.

Data published by the National Bureau of Statistics (NBS) China’s official Manufacturing PMI unexpectedly fell into contraction territory in October and came in at 49.5 as compared to 50.2 in the previous month. Adding to this, the gauge for the services sector also fell short of consensus estimates and dropped to 50.6 from 51.7 in September. The data fueled uncertainty over the economic recovery in China, which, in turn, undermines antipodean currencies, including the New Zealand Dollar (NZD).

The US Dollar (USD), on the other hand, attracts some dip-buying on the back of elevated US Treasury bond yields, bolstered by hawkish Federal Reserve (Fed) expectations. This turns out to be another factor contributing to a mildly offered tone surrounding the NZD/USD pair. The downside, however, remains limited as traders seem reluctant to place aggressive bets and now look to the outcome of the highly-anticipated two-day FOMC monetary policy meeting before positioning for the near-term trajectory.

The US central bank is scheduled to announce its decision on Wednesday and is widely expected to maintain the status quo. The US economic resilience, along with still sticky inflation, however, keeps the door open for one more rate-hike by the end of this year. Hence, investors will closely scrutinise the accompanying policy statement and Fed Chair Jerome Powell’s remarks at the post-meeting press conference for cues about the future rate-hike path, which will provide some impetus to the NZD/USD pair.

Heading into the key central bank event risk, Tuesday’s US economic docket – featuring the release of the Chicago PMI and the Conference Board’s Consumer Confidence Index – will be looked upon for short-term trading opportunities.

Technical levels to watch

 

Related Topics:
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Trending