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NZD/USD on the bids around 3-month high as greenback sellers re-enter

  • Sluggish housing data, Beige Book highlighting trade woes drag the USD down, making the Kiwi the best G10 performer.
  • At the mercy of offshore events, AU employment being the immediate catalyst, amid lack of data at home.

With the greenback bears re-entering the markets on sluggish housing data and trade woes, the NZD/USD pair carries its best G10 performer status forward while making the rounds to 0.6730 at the start of Thursday’s Asian session.

June month Building Permits and Housing Starts data from the US turn out to be disappointments after the upbeat performance of the earlier statistics, namely the NY Empire State Manufacturing Index and Retail Sales.

Adding to the US Dollar (USD) woes was the Federal Reserve’s Beige Book that highlighted flat manufacturing production and trade worries weighing on the future economic behavior. The same matched the recently dovish Fedspeak and put the rate cut speculations again on the front.

Given the USD weakness being positive for the commodity-linked currencies, risk-off sentiment played its role supporting the Kiwi more than the Aussie. The global risk barometer, the US 10-year treasury yields, dropped nearly 8 basis points to 2.043% at the end of Wednesday for the US markets.

Looking forward, a lack of data/events at home puts the quote at the mercy of offshore events. Among them, Australia’s June month employment data will be the key as being the largest customer of New Zealand. Following that, the US weekly Initial Jobless Claims and Philadelphia Fed Manufacturing data will be in the spotlight.

Technical Analysis

Repeated failures to provide a daily closing beyond 0.6740 favor the pair’s pullback to 200-day exponential moving average (EMA) level of 0.6714 ahead of highlighting 0.6700 and 100-day EMA level of 0.6665. However, sustained trading beyond 0.6740 enables the prices to aim for mid-April tops surrounding 0.6785 and then rush to cross 0.6800 round-figure.

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