New Zealand Dollar, NZD / USD, trade balance, Covid, RBNZ bets, PBOC call points
- New Zealand Dollar rises up USD as the risk increases
- The PBOC promises to support credit growth to sustain economic recovery
- NZD / USD reaches higher for another day, but the momentum may disappear
Wednesday ‘s Asia – Pacific outlook
The New Zealand dollar will benefit from taking risks in global markets on the second day as concerns about the Delta Covid option resolve. New Zealand’s July trade balance exceeded $ 402 million this morning, up from $ +245 million in June. Exports decreased from $ 5.96 billion to $ 5.75 billion and imports increased by $ 6.16 billion from $ 5.71 billion.
This morning’s data showed a vulnerable sign for the New Zealand economy. The decline in cross-border trade is likely to be due to its regional trading partners, which are suffering from consumption that paralyzes Covid’s restrictions, as in Australia. In addition, New Zealand sees the domestic Covid outbreak, which is mainly focused on the city of Auckland. The city is under fourth level closure until at least August 31st. RBNZ rate hiking stakes have fallen as the Asia-Pacific region struggles with the Delta strain, as evidenced by the decline in one-year overnight stays.
This means that the higher NZD / USD movement is likely to be more of a product US dollar weakness as a reflection of the fundamentals of NZD. The broad-based DXY index fell overnight as risk flows put the safe Greenback at a disadvantage. Comparison of the New Zealand dollar related to the commodity Canadian dollar highlights the difference NZD / CAD moving lower.
Speaking of the Canadian dollar, oil prices rose sharply as growth prospects supported demand-sensitive raw materials. WTI crude oil futures rose by almost 3%, which extended the profit of the previous session. Global Brent base oil rose 3.45% over the same period.
Outside of optimism about Covid, recent messages from the People’s Bank of China (PBOC) were likely to support the upswing. China’s central bank on Tuesday issued a statement promising “appropriate monetary growth” to keep the economy recovering. This step follows a slight slowdown in the power plant economy, including slower credit growth in recent months.
NZD / USD technical outlook:
NZD / USD continued to appreciate overnight for the Bullish Engulfing candlestick, which marked the end of the tough turn seen last week. The currency pair is now within 0.50% of the decline in the 50-day moving average (SMA), which may provide resistance. The value of the MACD oscillator histogram appears to decrease, but the upward momentum.
NZD / USD four hour chart
The chart has been created TradingView
New Zealand Dollar Trading Resources
– Written by Thomas Westwater, DailyFX.com analyst
Be in touch Thomas, use the comments section below, or @FxWestwaterTwitter