NZD/USD: Rebound capped below 0.7000 as NZ trade weighs
- Supported above 10-DMA of 0.6963.
- Unexpected surge in NZ trade deficit to weigh?
- US tax re-vote awaited.
The NZD/USD pair manages to find fresh bids near 10-DMA, which allows a bounce towards the 0.70 handle, although the recovery gains appear limited on the back of downbeat NZ fundamentals.
NZD/USD: Risk-on back in vogue?
The spot is seen consolidating the Asian rebound, as the bulls lack vigor amid worrisome NZ economic news, as New Zealand’s trade deficit more-than-doubled last month while the final GDT auction for 2017 saw a 3.9% decline in the overall dairy price index," Westpac reports.
More so, with the risk-off sentiment seeping back into markets amid the US government shutdown fears and tax reform bill re-vote, collaborate to the stalled recovery in the higher-yielding currency NZD.
Earlier today, the major quickly reversed the NZ trade data-led knee-jerk drop to near 0.6965 region, as the renewed weakness seen around the Treasury yields and US dollar helped eased the downward pressure. The US 10-year Treasury yields eased to 2.452%, having risen to the highest levels since Oct-end at 2.472% yesterday.
Next of relevance for the pair remains the US existing home sales data, as markets continue to eye the US tax bill re-vote due later today.
NZD/USD Levels to consider
The spot remains below the 0.7000 psychological level), with 0.6963 (10-DMA) and 0.6934 (Dec 13 low) key near-term downside areas. To the topside, a break above 0.7034 (2-month tops) could open doors towards 0.7043 (100-DMA).