NZD/USD ignores weaker than forecast NZ trade balance with all eyes on RBNZ
- NZD/USD stays on the back foot after August month New Zealand (NZ) trade balance details.
- Inquiry to impeach the US President, fading trade optimism triggered the USD weakness.
- RBNZ, trade/political headlines will be the key to watch.
Despite witnessing weaker than forecast outcomes of the August month New Zealand trade details, the NZD/USD pair seesaws around 0.6320 during the early Asian session on Wednesday.
New Zealand’s August month trade data shows that the headline Trade Balance slipped below $-1464M market expectations to $-1565M on YoY while also declining to $-5.48B against $-4.86B forecast. Further, Exports dipped below a downwardly revised $4.96B to $4.13B whereas Imports grew to $5.69B versus $5.66B (revised from $5.71B).
The Kiwi pair is under press off-late as doubts over the US-China trade deal join hands with the traders' cautious mood ahead of the key event, i.e. monetary policy meeting by the Reserve Bank of New Zealand (RBNZ).
The US Dollar (USD) weakness can be attributed to the allegations on the US President Donald Trump, which has led to an inquiry that can impeach him, about playing a role in the Ukrainian politics. Also adding to the greenback weakness could be markets’ risk-off after President Trump’s not so welcome comments at the United Nations General Assembly (UNGA) and downbeat Consumer Confidence numbers from the US.
The monetary policy meeting by the RBNZ is all on the Kiwi traders’ radar for now. The RBNZ isn’t expected to alter current monetary policy but the details of the statement will be closely examined to anticipate any future surprises like the August month rate cut of 0.50%.
Technical Analysis
Unless successfully trading above September 10 low nearing 0.6410, sellers can keep looking to the September 09 low near 0.6270 and the monthly bottom close to 0.6255, a break of which holds the gates for the pair’s further declines towards multi-month old falling trend-line support, at 0.6225 now.