- NZD/USD rises for the first day in three, refreshes intraday top of late.
- China rescues stocks after IT, private education crackdown.
- US dollar tracks Treasury yields to refresh two-week low.
- Bulls ignore soft NZ data ahead of US Q2 GDP, updates concerning covid, US stimulus are also important.
NZD/USD edges higher around 0.6970, intraday high intraday 0.6973, as European traders prepare for Thursday’s bell.
The kiwi pair not only cheers the broad US dollar weakness but also benefits from Chinese headlines to consolidate the weekly losses. In doing so, the quote ignores covid woes in Asia-Pacific, especially at the key customer Australia, as well as downbeat data at home.
US Dollar Index (DXY) prints 0.15% losses on a day by the press time, testing the lowest level since July 12. The greenback gauge stays pressured for the fourth day as the Fed refrains from entertaining taper requests and the US Senators are finally ready to discuss President Joe Biden’s infrastructure spending bill after weeks of haggling.
Elsewhere, the People’s Bank Of China (PBOC) followed the Chinese Security body’s push to tame equity bears. “The PBOC pumped in 30 billion yuan ($4.6 billion) of liquidity into the financial system with seven-day reverse repurchase agreements, resulting in a net injection of 20 billion yuan on Thursday,” said Bloomberg. Earlier in Asia, CNBC came out with the news suggesting the China Securities Regulatory Commission’s (CSRC) conciliatory moves.
It should be noted, however, that the Delta covid variant and downbeat prints of New Zealand’s ANZ Business Confidence and Activity Outlook for July raise doubts over the NZD/USD pair’s further upside.
Market sentiment also dwindles, as portrayed by the US Treasury yields and stock futures, which in turn could create hardships for the kiwi bulls. Above all, increasing odds of the RBNZ’s rate cut in August keeps the NZD/USD buyers hopeful.
Even so, preliminary readings of the US Q2 GDP and risk catalysts can offer intermediate clues to the pair traders.
Technical analysis
Unless crossing a monthly resistance line near the 0.7000 threshold, NZD/USD bulls stay unconvinced.
