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New Zealand Dollar sitting under 66c on the back of US-China tariffs

NZD - New Zealand Dollar

In the absence of any local data, the NZD/USD pair looked elsewhere for direction and did initially firm on Friday night on improved prospects for a deal out of US-China trade talks. Having touched a high of 0.6614 the pair was unable to hold on as the 11th round of trade talks between the two ended without a deal and the U.S confirmed a new round of tariffs on Chinese imports. The White House announced raising existing tariffs on $200 billion worth of Chinese imports from 10% to 25%. Beijing has already vowed to retaliate with unspecified “countermeasures,” which are likely to include higher tariffs on American goods.

Looking ahead, New Zealand sees the release of the Food Price Index which measures the change in the price of food and food services purchased by households. The data is classed as low tier and unlikely to have too much of an effect the local unit.

From a technical perspective, immediate support-line can be seen at 0.6570, followed by 0.6520. Meanwhile, 0.6630 and 0.66650 seem nearby resistances to conquer for buyers.

Key Movers

US consumer prices increased 0.3% last month lifted by rising gasoline, rents, and health-care costs however, underlying inflation remained muted which supports the Fed’s view of no further rate increases this year. EUR/USD touched a session high of 1.1253 on the back of the CPI data.

In the UK, GDP data increased by 0.5% in the first quarter of 2019, up from a sluggish pace of 0.2% in the final three months of last year, the Office for National Statistics (ONS) said today. The pick-up in growth was driven by a 2.2% increase in manufacturing output. GBP/USD touched a session high of 1.3047, but settled back down around 1.3000 at the close.

Heightened uncertainty about the trade deal also saw a nervous week for international markets. Foreign traders unloaded $640 million worth of Chinese shares daily, major stock markets in Asia and Europe weakened, and the MSCI AC World Index lost $2.1 trillion in value.

Expected Ranges

NZD/USD: 0.6550 - 0.6630 ▲

NZD/EUR: 0.5840 - 0.5910 ▲

GBP/NZD: 1.9620 - 1.9820 ▼

NZD/AUD: 0.9390 - 0.9470 ▲

NZD/CAD: 0.8810 - 0.8900 ▼