NZD/USD clings to gains above 0.6320 despite US-China trade worries
- New Zealand government's fiscal surplus widened to the highest level since 2008.
- The Chinese delegation will reportedly leave Washington earlier than planned.
- US Dollar Index extends consolidation below the 99 handle.
The NZD/USD pair gained traction during the Asian trading hours on Tuesday after the latest government data showed that the account surplus rose by $2 billion to $7.5 billion in the fiscal year to June 2019 to surpass the Treasury's forecast by $4 billion. The pair broke above the 0.63 mark and touched a daily high of 0.6326. As of writing, the pair was up 0.52% on the day at 0.6321.
Trade worries cap the pair's gains
Meanwhile, the latest headlines surrounding the United States (US)-China trade conflict revived concerns over the sides failing to reach a deal at this week's high-level talks and made it difficult for the NZD to gather further momentum.
The South China Morning Post (SCMP) claimed that the Chinese delegation was looking to leave the US one day earlier than initially planned and the Chinese Foreign Ministry earlier on Tuesday said that it was preparing to retaliate to the US’ backlisting of the Chinese firms.
On the other hand, the data published by the US Bureau of Labor Statistics on Tuesday revealed that the Producer Price Index (PPI) declined by 0.3% on a monthly basis in September and caused the US Dollar Index to remain in the lower half of its daily range below the 98.90 mark. Later in the session, the IBD/TIPP Economic Optimism Index and Chicago Fed President Charles Evans' and Federal Open Market Committee (FOMC) Chairman Powell's remarks will be looked upon for fresh impetus.
There won't be any macroeconomic data releases from New Zealand on Wednesday.
Technical levels to watch for