Blow to Donald Trump as US goods trade deficit widens
The New Zealand dollar rose today after the RBNZ held interest rates at historic lows. The bank also left the chances of a rate cut later in the year open as the world continued to battle with the global trade conflict. It also blamed the weak growth in the services and dairy sectors. This decision was in line with what the bank had guided previously and what investors were expecting. Investors now expect 25-basis points interest rate cuts in the August meeting. The decision came a day after the country released impressive import and export data for the month of May.
The price of Bitcoin continued the rally started early this year. After crossing the important milestone of $10,000 on Sunday, the cryptocurrency today moved closer to the $13,000 level. This was the highest level since January last year. Investors have become bullish on the currencies following the launch of Libra coin by Facebook a week ago. They hope that the ‘cryptocurrency’ will lead to more adoption of the cryptocurrencies in future. In the US, JP Morgan is also working on a JPM Coin, which will be used internally for international funds transfers.
Global stocks were mixed today as traders started focusing on upcoming talks between United States and China at the G20 meeting. In China, the A50 and Shanghai indices moved slightly lower. In Japan, the Nikkei too declined. In Europe, the DAX, FTSE, and CAC increased by 64, 3, and 9 points respectively. Traders hope that talks between the two presidents will lead to a better outcome that will calm the markets. China has insisted that the two sides must be willing to make compromises. Yesterday, Fed Chair, Jerome Powell said that the Fed was inclined to lower rates in the upcoming meeting in July. In a Wall Street Journal report, large chip companies like Intel and Micron had found ways to continue supplying their products to Huawei.
In the United States, Donald Trump was dealt a blow after the trade numbers showed that the country’s trade deficit continued to widen. In May, the goods deficit reached $74.65 billion, which was higher than the expected $71.80 billion. In April, the deficit was at $70.92 billion. At the same time, the goods orders non-defense ex air rose by just 0.4% while the core durable goods orders slumped by -1.3%. This is a sign that the US economy is slowing.
The BTC/USD pair continued moving higher as the bullish momentum continued. The pair reached a high of $12950, which is $50 shy from the important level of $13,000. On the four-hour chart, the pair is trading above all the short, medium, and long-term moving averages. The RSI remains in the overbought level and is currently at the 90 level. The momentum indicator remains above the important level of 100. The pair will likely continue riding the momentum, although a pullback is possible in the near future.
The NZD/USD pair continued the upward momentum after the central bank delivered its interest rates decision. The pair moved to a high of 0.6680, which is the highest level since June 10. This was the second peak of the cup and handle pattern. The price is above the short and medium-term moving averages while the RSI is at the overbought level of 70. There is a likelihood that the pair will retest the important support of 0.6600, which is also along the 61.8% Fibonacci Retracement level.
The EUR/USD pair was relatively unchanged today. It is now trading at the 1.1366 level, which is slightly higher than the yesterday’s low of 1.1345. On the four-hour chart, the pair is at the middle line of the Bollinger Bands. The RSI has moved from the overbought level of 70 to the current low of 58. There is a likelihood that the pair will resume the upward trend as investors focus on the upcoming Fed statements.