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Market News NZD/USD Pauses en Route to 0.6500 Despite Bearish NZ/China Data

NZD/USD Pauses en Route to 0.6500 Despite Bearish NZ/China Data

NZD/USD accepts bids to extend intraday low and reverses an eight-day upswing. China PMIs were mixed, while New Zealand housing and ANZ figures also disappoint Kiwi purchasers. In advance of second-tier US data, mixed sentiment and higher rates support the dollar's recovery.

Alina Haynes
2022-05-31
510

截屏2022-05-31 上午11.33.16.png 

 

During Tuesday's Asian session, the NZD/USD recovers from an intraday low but remains under pressure around a three-week high as it consolidates its two-week-old upward trajectory. The most recent decline in the kiwi pair may be attributable to mixed economic data from China and New Zealand, as well as a resurgence in the US dollar.

 

In spite of this, China's official activity data showed a decline in May, with the headline NBS Manufacturing PMI matching estimates at 49.6 compared 47.4 previously, and the Non-Manufacturing PMI falling to 47.8 below the market consensus of 50.7.

 

In contrast, New Zealand (NZ) Building Permits decreased by -8.5 percent in April, compared to the predicted 0.4% decline and the before increase of 6.2%. ANZ Activity Outlook and ANZ Business Confidence both declined, which weighed on the NZD/USD exchange rate. Consequently, the ANZ Activity Outlook for May decreased to -4.7% from 5.7% projected and 8.0% previously, while Business Confidence sank to -55.6 from -42 previously and -33.2 market expectation.

 

In addition to the most negative data, the market's mixed sentiment and the recovery of the US dollar also weigh on the NZD/USD exchange rate. Nonetheless, risk appetite weakens Tuesday morning as bond purchasers take a break, supporting a pullback in riskier assets such as stocks and commodities. Additionally, developments from Europe and month-end consolidation challenged the earlier risk-on sentiment. S&P 500 Futures reverse from a three-week high that was flashed the day before in order to retest the 4,155 level. In addition, 10-year US Treasury yields increase by 8.5 basis points (bps) to 2.835% as of press time.

 

Ahead of time, NZD/USD traders should monitor how full markets and data react to the current shift in attitude. May's Chicago Purchasing Managers' Index and Dallas Fed Manufacturing Business Index will also be crucial.

Technical Evaluation

NZD/USD falls back from the 50-day EMA, at 0.6565 at press time, but a rising support line from mid-May, near 0.6510, tests the pair's sellers.

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