New Zealand Dollar, NZD / USD, Building Permits, Covid, Chinese PMI – Call Points
- New Zealand Dollar softens versus USD as the risks of Covid weigh
- China’s NBS PMI data is likely to provide a risk for today’s events
- NZD / USD softens resistance after last week’s rally
Tuesday ‘s Asia – Pacific outlook
The New Zealand dollar fell against the dollar US dollar traders try to balance risk cases. Wall Street rose higher in New York’s trading session on Monday, with growth-sensitive technology stocks leading the way. Equity traders will press the buy button after Federal Reserve Chairman Jerome Powell said the terms of the interest rate hike are still far away.
Meanwhile, the situation surrounding Covid continues to affect sentiment in other markets. Fed signaling makes investments attractive, as closures in Asia-Pacific point to a slowdown in the economy. Australia’s New South Wales (NSW) on Monday reported a record rise in Covid cases over the past 24 hours on Monday. The state, including Sydney, saw 1,290 locally acquired cases. Elsewhere, New Zealand added 52 active cases in the last 24 hours, according to a recent report from the Department of Health.
The US sees its rise in the Covid cases as a cause for concern. Differences in restrictions appear to attract capital flows to US markets. Although Australia, New Zealand and many Asian countries continue to close, the United States remains open to business. This, together with the Federation’s somewhat weak interest rate forecast, is likely to explain some of the upside in both equities and the US. Dollar’s hardened position near the two-week low.
Adding to the persistent Covid troubles over the minds of traders is a step by the European Union to impose travel restrictions on the US, according to a statement from the EU Council. The US is well above the EU guidelines of 75 new virus cases per 100,000 people. Relevant EU governments may or may not drive the recommendations, although this step was enough to put pressure on airlines’ shares. Vaccinated people are likely to be exempt from restrictions.
New Zealand began an economic paper on Tuesday. The island state saw a 2.1% decrease in building permits in July compared to the previous month, compared to 4.0% in June. NZD / USD remained unchanged in the report. Elsewhere, Japan reports unemployment and industrial production data. Australia sees TD Securities / Melbourne Institute’s inflation data outperforming the wires.
The August PMI figure for Chinese NBS production is the main risk of events today. Analysts expect this figure to fall to 50.2, which is somewhat lower than last month’s 50.4. China, like other countries, is struggling with a slowdown. Steel production has fallen sharply earlier this year as a result of government action to cool sky-high commodity prices, but some doubt they will persist now that a slow economy is putting pressure on policymakers.
NZD / USD technical outlook:
At the start of the week, the New Zealand dollar moved lower against the Greenback, lowering the trend line that confirmed prices after last week’s rally. The currency pair was above the 50-day moving moving average and 78.6% fibonacci retracement, offering a bullish sign. Breaking above the trend line is likely to open the door to a better rise. Alternatively, exceeding the 50-day SMA and Fib levels could lead to a repetition of the previous week’s upward movement.
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