NZD/USD stays firm around 0.6730 ahead of China PMI
- NZD/USD holds onto its strength after three consecutive days of rising.
- Broad USD weakness, trade optimism help the kiwi to stay strong.
- China’s headline PMI will be key to watch before the New Year break.
NZD/USD trades around 0.6730 at the start of Tuesday’s Asian session. The kiwi pair remains on the front foot after posting three consecutive days of upward trajectory, not to forget a multi-week rally. The US dollar’s broad declines, coupled with optimism surrounding the phase-one deal, seem to be the reasons behind the quote’s latest run-up. China’s official PMI numbers are the last catalyst to follow before wrapping up for the year-start holiday on Wednesday.
Neither Chicago Purchasing Managers’ Index nor Pending Home Sales could help greenback recover its week-start losses given Dallas Fed Manufacturing Business Index being way below market forecast and prior. The US currency seems to bear the burden of year-end liquidation and upbeat numbers elsewhere.
Weekend news that Beijing is ready to respect the phase-one deal conditions if the US abides by them and avoid interfering with China’s internal issues followed another push. This time it is relating to the dragon nation’s key trade negotiator’s, the Vice Premier Liu Hi, visit the Washington next Saturday. The visit with trade delegation is speculated towards signing the phase-one deal as the US President Donald Trump has already conveyed that both the nations are nearing the signing in ceremony but didn’t communicate the details.
The update has a positive impact on the market’s risk sentiment, which in turn helps the US 10-year treasury yields and stocks to mark gains.
While trade optimism might keep the kiwi pair positive, investors will also look towards China’s official PMI numbers for December especially after November month’s upbeat readings. Forecasts suggest the headlines NBS Manufacturing PMI to register 50.1 mark against 50.2 prior whereas the Non-Manufacturing PMI could also step back to 53.6 from 54.4 earlier readouts.
On the other hand, the Consumer Confidence and housing market numbers will decorate the US economic calendar with expectedly mixed results.
Technical Analysis
Buyers are now aiming July top, near 0.6790, whereas sellers might refrain entry before a downside break of June high surrounding 0.6680.