NZD/USD keeps losses near 0.6950 post-China inflation
- USD bounces in Asia.
- Little impressed by China CPI, PPI data.
- RBNZ keeps rates on-hold, as widely expected.
- US tax reforms in focus.
Having witnessed a steep drop from post-RBNZ decision-led highs, the NZD/USD pair entered a phase of consolidation over the last hour, with the bulls finding little impetus from the Chinese mixed inflation data for the month of October.
NZD/USD looking to test 5-DMA support of 0.6934
The spot came under fresh selling pressure and breached the midpoint of 0.69 handle, as the NZD was sold-off into RBNZ Assistant Governor McDermott’s currency jawboning. RBNZ's McDermott noted that it would be good if the NZD fell more. Meanwhile, resurgent broad-based US dollar demand also collaborated to the renewed weakness in the pair.
However, the sell-off stalled and the major is seen consolidating the losses on the release of China’s CPI and PPI reports, which had limited impact on the NZD/USD pair. China's Oct CPI mixed, PPI surprises to the upside
Also, the Kiwi manages to find support from the RBNZ policy announcements, with the outlook for an early 2019 hike maintained, while the bank left the rates on-hold at 1.75%.
Focus now shifts towards the US jobless claims release due later on Thursday. In the meantime, markets assess the latest unimpressive Chinese trade and Inflation Chinese trade data for fresh momentum on the prices. Also, of note today will be the US tax reforms, which is expected to have a significant impact on the USD price-action.
NZD/USD Levels to consider
The NZD remains supported above 0.6934/27 (5, 20-DMA), below which 0.6910 (10-DMA) and 0.6875 (Nov 6 low) are key near-term downside areas. To the topside, a test of 0.6974 (daily top) due on the cards, which could open doors towards 0.7000 (natural resistance).