NZD/USD retraces to 0.6410 amid lack of fresh clues
- NZD/USD trades near the eight-day low, flashed yesterday, amid broad USD strength.
- The US President’s trade positive tweets, an extension of Huawei relief favored risk on.
- Lack of data/events will keep trade news in the spotlight.
Following its drop to early-month low, NZD/USD retraces to 0.6410 at the start of Tuesday’s Asian session.
The Kiwi pair slumped at the week-start as the markets cheered the 90-day delay on Huawei restrictions, previously levied by the US, coupled with the US President’s tweet upbringing the odds of a trade deal with China.
Investors also respected the overall strength of the US Dollar (USD) amid broad risk-on, as can be seen in the recovery of global treasury yields. It should be noted that market players gave little importance to the US President’s call for a 100 basis point (bps) cut into the Fed rate as President of the Federal Reserve Bank of Boston Eric Rosengren poured cold water on the statements.
Elsewhere, China’s revision of loan rates is considered as a step closer towards the free-floating currency system, adding fuel to market optimism.
Looking forward, investors have no major data/events scheduled for publishing at home, which in turn could keep them tilted to trade news for fresh direction. However, monetary policy meeting minutes from the Reserve Bank of Australia (RBA) can offer intermediate moves to the quote as Australia is the latest customer of New Zealand.
While 0.6377 and 2016 low, near 0.6348, are likely immediate targets for sellers, buyers looking for 0.6475 and 0.6500 can enter on the break of 0.6440 short-term trend-line resistance.