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NZ trade data could win this week’s price action - BNZ

FXStreet (Barcelona) - Analysts at BNZ note that the anticipated negative NZ trade data will be guiding the price pattern for NZD this week.

Key Quotes

“Our momentum model has decided to get long NZD against the EUR, JPY, AUD, and GBP. This comes despite structural headwinds we believe the NZD will face over the coming 12 months, including the declining terms of trade and the maturing NZ interest rate cycle.”

“With the pressure (and focus) on other currencies at the moment, we may have to be resigned to NZD/USD consolidating above 0.78 in the near future, especially with USD long positions already very extreme.“

“The events calendar this week suggests this might be the case. There are US data aplenty, but perhaps none with the potential to instigate a trip below 0.77.”

“US data aplenty this week, but perhaps none with the potential to instigate a wholesale USD rally. At the margin, we think the (expected) negative NZ trade data could win this week's price action.“

“We would keep an eye on the PCE core deflator (for an update of how inflation is tracking) as well as the Chicago PMI.”

“Locally, we look the RBNZ inflation expectations survey, as well the monthly trade balance number, which should register a hefty decline.”

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