NZD/USD bulls come back to the table on China data
- NZD/USD bulls move back in following firm China data.
- NZD/USD eyes a fresh high for the day.
NZD/USD was under pressure by some 0.2% on the day following in the footsteps of the Australian Dollar that tumbled on a batch of disappointing data on Wednesday. However, at the time of writing, NZD/USD is trading at 0.6185, off its lows on a positive spin from China.
Australia reported Gross Domestic Product and the monthly Consumer Price Index as follows:
- Australia Weighted CPI YoY Jan: 7.4% (est 8.0%, prev 8.4%).
- Australia GDP SA QoQ Q4: 0.5% (est 0.8%, prev 0.6%) – Australia GDP YoY Q4: 2.7% (est 2.7%, prev 5.9%).
The outcome has weighed heavily on the Aussie that now has shorts moving in for the first time this week following Monday’s initial balance, pulling the Kiwi lower in a failed upside breakout scenario. This potentially leaves prospects of a sell-high opportunity for the London and US sessions as shorts dominate the space in a strong US Dollar environment. The greenback is being supported on the US rate futures that have priced in the Federal Reserve’s target policy rate peaking at 5.4% in September and the Fed’s policy rate is currently in a 4.50%-4.75% target range.
Meanwhile, we have some data coming out from China today that could be supportive. So far, China’s Manufacturing Purchasing Managers Index (PMI) and the official Non-manufacturing PMIs have been released as follows:
- China Manufacturing PMI Feb: 52.6 (est 50.6, prev 50.1).
- China Non-Manufacturing PMI Feb: 56.3 (est 54.9, prev 54.4).
AUD found some solace here which would also be expected to support the Kiwi. Chinese Caixin manufacturing PMI came in with an actual 51.6 (forecast 50.7, previous 49.2) which is also supportive.