NZD/USD breaks 0.6000 as trade war risk amplifies ahead of the key day
- NZD/USD bears attack one-week low following the latest declines.
- Trump administration keeps China on the gunpoint.
- Economic restart in focus, New Zealand could provide guidance on Level 2 alert.
- RBNZ inflation expectations, China/Aussie trade figures will be important as well.
While extending its previous day’s fall to seven-day low, NZD/USD drops below 0.6000 during the early Asian session on Thursday. The pair recently came under pressure amid the fresh signals from the US suggesting further tensed relations between the US and China while going forward.
US President Donald Trump reiterated his discomfort, later backed by the White House statement, with US-China trade relations and warned that China may or may not keep the trade deal. After that, US Secretary of State Mike Pompeo indicated the Trump administration’s interest in Hong Kong, which the dragon nation (China) doesn’t like.
Elsewhere, downbeat US economics failed to disappoint the greenback buyers as risk-tone remains heavy. While portraying the same, S&P 500 Futures decline 0.20% after the mildly weak performance of Wall Street.
Moving on, the New Zealand (NZ) government is likely to guide how Level 2 of alert will look like for the Pacific economy. On Wednesday, NZ PM Jacinda Ardern struck an upbeat tone while praising the government’s time effort. A repetition of any such statements, coupled with a heavy easing of the lockdown, could help the Kiwi pair recover its latest losses.
Additionally, the RBNZ Inflation Expectations for the first quarter (Q1) of 2020, the previous 1.93%, as well as China Trade Balance, forecast $6.35B versus $19.93B revised prior, could also entertain the kiwi traders.
It should, however, be noted that amid all these catalysts, virus/trade updates will keep their importance intact.
Technical analysis
Sustained trading below 50-day SMA, currently near 0.6035, directs the quote towards the monthly support line, at 0.5955 now.