NZD / USD Bears Enter At The Highs And Exert Pressure Below 0.6250

NZD / USD is down approximately 0.27% and has declined from a high of 0.6257 to a low of 0.6238, erasing some of the midweek gains made in response to data showing a revival in Chinese demand, which boosted commodity prices.

This followed a disappointing report from Australia, where GDP growth declined to 0.5% quarter-over-quarter compared to 0.7% previously and consensus expectations of a 0.8% increase. The data increased the possibility that the Reserve Bank of Australia will halt its rate hikes earlier than expected, which initially weighed on both currencies.

Nonetheless, the kiwi benefited from speculative purchasing after China's non-manufacturing activity grew at a higher rate in February and the Caixin/S&P Global manufacturing PMI reading for last month also exceeded expectations. The offshore yuan increased 1.3% to 6.8683 per dollar, marking its largest one-day increase since late November.

Analysts at ANZ Bank noted that the New Zealand dollar had outperformed the majority of its peers and performed well on crosses, particularly NZD/AUD. "EUR was a strong performer after the strong German CPI print, and the Kiwi followed suit, possibly exacerbated by NZD /AUD stop-loss purchasing, as there was no obvious NZD catalyst. That may see price action tame in the coming days.

The USD sentiment is also shifting. Strong data last week caused the DXY to surge as bond yields rose, but last night's string of solid data weighed on the dollar in a "good news is bad news" manner, likely due to concerns that the Fed will engineer a recession. Is the strength of the NZD a belated acknowledgement of economic resiliency and cyclone recovery? Has done well."