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Improving Data Supports NZD

By Swissquote LtdCurrenciesNov 26, 2019 12:07
uk.investing.com/analysis/improving-data-supports-nzd-200434624
Improving Data Supports NZD
By Swissquote Ltd   |  Nov 26, 2019 12:07
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The latest batch of data releases have been supporting the kiwi as the Reserve Bank of New Zealand decision to stay still while maintaining a dovish bias is finding broad support.

NZD is holding to its gains following the rate decision two weeks ago, with NZD/USD (-4.50% year-to-date) maintained above psychological level of 0.64. Yet mixed market movements are showing first signs of market lull ahead of US Thanksgiving Day holiday as well as Black Friday thereafter after both the Nasdaq and the S&P 500 have broken record highs again.

The dull phone call between Chinese Vice Premier Liu He and US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, although confirming that both parties should remain in contact about a phase one agreement, should keep markets on hold as a risk of escalation is reducing. Tariffs on $160 billion worth of Chinese goods due on 15 December 2019 is still in the pipeline, albeit an extension of the deadline is likely. In this context, NZD is expected to trade sideways as the RBNZ view that risks to the economy are “titled to the downside” has yet to be confirmed.

The uptick in manufacturing PMI in October to 52.6 (prior: 48.4), back to expansion territory for the first time since June 2019, supported by improving activities in both new orders and production followed by 3Q retail sales rising at 1.60% (prior: 0.20%), largely above forecasts of 0.50%, seems to confirm a recovery in the New Zealand economy. The question of whether the economy will close the year on a positive note should depend strongly on the positions of both the US and China.

Disclaimer: While every effort has been made to ensure that the data quoted and used for the research behind this document is reliable, there is no guarantee that it is correct, and Swissquote Bank and its subsidiaries can accept no liability whatsoever in respect of any errors or omissions, or regarding the accuracy, completeness or reliability of the information contained herein. This document does not constitute a recommendation o sell and/or buy any financial products and is not to be considered as a solicitation and/or an offer to enter into any transaction. This document is a piece of economic research and is not intended to constitute investment advice, nor to solicit dealing in securities or in any other kind of investment.

Although every investment involves some degree of risk, the risk of loss trading off-exchange forex contracts can be substantial. Therefore if you are considering trading in this market, you should be aware of the risks associated with this product so you can make informed decisions prior to investing. The material presented here in not to be construed as trading advice or strategy. Swissquote Bank makes a strong effort to use reliable, expansive information, but we make no representation that it is accurate or complete. In addition, we have no obligation to notify you when opinions or data in this material change. Any prices stated in this report are for information purposes only and do not represent valuations for individual securities or other instruments.

Improving Data Supports NZD
 

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Improving Data Supports NZD

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