NZD/USD drops to fresh 3-week low after RBNZ’s Orr, mixed data, 0.6760 gains seller’s attention
- RBNZ Governor signalled future twists in the monetary policy.
- Domestic consumer confidence improved but building permits declined
NZD/USD trades near 0.6780 at the beginning of Asian sessions on Friday. The Kiwi pair slide to the lowest in three weeks after the RBNZ Governor Adrian Orr spoke at an event hosted by the central bank. Traders gave less importance to domestic data amid the Reserve Bank of New Zealand’s (RBNZ) easing bias. Headlines concerning the US-China trade deal will be in focus with few second-tier data from the US.
The NZD/USD pair stretched its losses forward after Orr said that the central bank is focused on inflation employment objectives amid low, stable inflation and broad financial stability. Looking into the recent changes at the RBNZ’s monetary policy committee, Mr. Orr said the Bank's easing bias is a starting point for policy committee.
Traders took it as a sign of further easing in the future and accelerated on the New Zealand Dollar (NZD) selling. In doing so, markets gave little reaction to the ANZ consumer confidence data that improved to +0.8% MoM over -0.7% prior. Though, seasonally adjusted building permits for the month of February declined to +1.5% against +13.6% (revised) previous growth.
With the US delegates in China discussing much-awaited trade deal, investors might not risk missing developments surrounding the event. Additionally, the US has a slew of second-tier data points like personal income and spending, new home sales, Chicago purchasing managers’ index (PMI) and Michigan consumer sentiment index.
February month personal income and spending both are likely to print +0.3% growth on a monthly basis versus -0.1% and -0.5% respective priors. Chicago PMI could soften to 61.0 from 64.47 in March whereas Michigan consumer confidence may confirm an initial forecast of 97.8. In the end, new home sales may increase to +0.620 million from +0.607 million prior.
NZD/USD Technical Analysis
Having dropped beneath 50-day and 100-day simple moving averages (SMAs), the NZD/USD pair may test an upward sloping support-line stretched since January 22, at 0.6760 now, a break of which can further drag the quote 200-day SMA level of 0.6735.
On the upside, 100-day SMA level of 0.6815, followed by 0.6830 comprising 50-day SMA, could limit immediate advances whereas 0.6870 and 0.6900 may become sellers’ favorite then after.