NZD/USD rebound hopes dashed after poor PMI data as APAC eyes China credit data
New Zealand dollar weakness may continue into the weekend; traders on the watch for China credit data and Hong Kong GDP and NZD/USD technicals ready to weaken further ahead of SMA cross.
The New Zealand dollar fell to its lowest level since June 01, 2020, versus the US dollar amid a volatile overnight session on Wall Street. The benchmark S&P 500 index traded down well over 1% before trimming losses and finishing the day nearly in the green. Other risk assets like Bitcoin exhibited similar behavior. That may indicate that sentiment has bottomed in the short term, although traders may become more cautious going into the weekend.
New Zealand’s Performance of Manufacturing Index fell to 51.2 in April from 53.8 in March, according to Business NZ. NZD/USD was little changed on the news. The Kiwi dollar has been dragged lower by falling commodity prices as well as the broader risk-off move throughout markets. However, bright signs are emerging for the domestic economy after the government announced, on Wednesday, that it plans to fully reopen the country to travel at the end of July. The move also seeks to attract skilled labor.
Today, APAC traders are looking out for an April update on China’s credit conditions. Analysts expect to see new Yuan loans fall to 1.51 trillion from 3.13 trillion Yuan. USD/CNH rose to its highest level since September 2020. The Chinese currency has also declined in recent weeks against its other major peers, which removes the narrative that US dollar strength alone is responsible for the weakness. The main culprit behind that weakness is likely the ongoing Covid lockdowns across major cities.
Gold prices fell, likely as a result of producer price index (PPI) data out of the United States. The US PPI index rose to 11.0% in April, beating the 10.7% consensus estimate. Real yields rose after the data crossed the wires, increasing the opportunity cost for gold investors. Meanwhile, silver prices fell through a key support level. RBA Deputy Governor Michele Bullock is set to speak today, and traders will also be watching the wires for a final reading on Hong Kong’s first-quarter GDP growth rate.
NZD/USD technical forecast
NZD/USD continues to plummet against a risk-averse market backdrop. Prices have now fallen for the past seven weeks, with much of that downside contained within a descending channel. The 50-day Simple Moving Average (SMA) looks to be on track to cross below its 100-day SMA, a bearish sign. A near-term relief rally may be in order, but the technical posture doesn’t look hopeful for a sustained rally.
NZD/USD daily chart
This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. This information Advice given in this article is general in nature and is not intended to influence any person’s decisions about investing or financial products.
The material on this page does not contain a record of IG’s trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Start trading forex today
Trade the largest and most volatile financial market in the world.
- Spreads start at just 0.6 points on EUR/USD
- Analyse market movements with our essential selection of charts
- Speculate from a range of platforms, including on mobile
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.