NZD/USD drops further to test 0.6850 on China stocks-led risk-off
- Dismal Chinese industrial profits weigh.
- Risk-off sentiment sours on China stocks rout.
- USD reverses last week’s sell-off
The selling pressure seen around the NZD gathered steam in Asia, knocking-off NZD/USD to the lowest levels in three-day at 0.6854 levels, as risk-off sentiment returns to the market.
NZD/USD: 0.6900 – a tough nut to crack
A major turnaround in risk condition on the back of the renewed weakness seen in the Asian stocks, led by the extension of the sell-off in the Chinese stocks, weighed heavily on the higher-yielding currency Kiwi. China’s benchmark index, the Shanghai Composite trades near 3,330, the cheapest since August 25th.
Moreover, a tepid recovery staged by the US dollar against its main competitors, after last week’s thrashing, also added to the weight on the spot. Further, the major also remains under pressure, the wake of the disappointing Chinese industrial profits data and NZ Q3 retail sales report. NZ: Retail spending quiet in the September quarter
Heading into a new week, the focus remains on the Fedspeaks, RBNZ Financial Stability Report and US GDP numbers for a fresh take on the pair.
NZD/USD Levels to consider
The NZD finds support at 0.6849 (10-DMA), below which 0.6800 (round number) and 0.6780 (multi-month lows) are key near-term downside areas. To the topside, a break above 0.6900 (round number) could open doors towards 0.6972 (50-DMA).