NZD/USD consolidates NZ jobs-led rebound post-China PMI
- NZD lifted on solid NZ jobs
- Back below 0.6900.
- FOMC decision in focus.
Having staged a solid rebound to 0.6914 levels on upbeat New Zealand employment data, the NZD/USD pair entered a phase of consolidation, with the Chinese Caixin manufacturing PMI data having virtually no impact on the rates.
NZD/USD extends consolidation
The Kiwi extends its gradual reversal from five-month lows of 0.6818 into a fourth day today, as the bulls found renewed impetus from better-than-expected NZ jobs report while persisting risk-on trades amid rallying Asian equities and oil prices also collaborate to the renewed upside in the higher-yielding currency, NZD.
However, the spot failed to benefit from in-line with expectations Chinese Caixin manufacturing sector activity report released for the month of October and remained below 0.69 handle on the back broad-based US dollar strength, after the US house tax committee Chairman Brady announced that the Committee will release tax bill on Thursday
From a broader perspective, ongoing worries over the NZ Government’s ability to deliver on the proposed reforms and monetary policy divergence between the Fed and RBNZ could keep any recovery short-lived. NZ PM Ardern: Proposed ban on foreign house purchases to take effect in early 2018
With the NZ jobs and China’s PMI data out of the way, attention now turns towards the US ADP jobs and ISM manufacturing PMI reports for fresh trading impetus ahead of the much-awaited FOMC decision.
NZD/USD Levels to consider
The NZD slips back below 0.6900 (round figure), below which 0.6867/61 (daily pivot/ 5-DMA) and 0.6818 (5-month low) are key near-term downside areas. To the topside, a test of 0.6924 (classic R2) due on the cards, which could open doors towards 0.7010 (20-DMA).