NZD/USD: Depressed below 0.6000 amid broad US dollar strength
- NZD/USD remains pressured near a three-week low.
- Cautious optimistic comments from Fed’s Powell help the US dollar.
- US-China tussle weighs on the commodity-linked currencies.
- A light calendar can keep qualitative catalysts as the key.
NZD/USD drops to 0.5930 amid the initial hour of the Tokyo session on Monday. The kiwi pair stays on the back foot as recent comments from the Fed Chair help the US dollar to regain its strength whereas US-China tension weighs on the Antipodeans.
Also exerting downside pressure on the pair could be New Zealand’s BusinessNZ Performance of Services Index (PSI) for April. The figures drop to 25.9 from 52.00 prior registered in February. It should be noted that the gauge missed out on March readings.
The Fed Chair Jerome Powell reiterated the central bank’s readiness to act and use all weapons during his “60 minutes” interview on the US TV. Though, what was notable was the central banker’s upbeat tone concerning the odds of the US economic recovery and criticism of negative rates.
Read: Fed’s Powell: Fed is not out of ammunition, can do more if required – 60 Minutes interview
US President Donald Trump also added his part of keeping the greenback on the upper hand. The Republican leader tweeted, “The number of Coronavirus cases is strongly trending downward throughout the United States, with few exceptions. Very good news, indeed!”
The aforementioned catalysts help the market’s risk-tone sentiment to remain positive, as portrayed by the S&P 500 Futures, Asian stocks and the US 10-year Treasury yields.
However, the US-China tussle is something that makes global market players worried. US President Donald Trump keeps alleging China for the global coronavirus (COVID-19) outbreak and cited a “super-duper missile” to outpace military rivals including Russia and China. On the other hand, China’s Global Times’ Editor called the dragon nation to develop nuclear arsenal to possess enough capability so that the US dare not proactively attack China under any circumstances.
Given the lack of major data/events left for publishing, the pair traders will keep eyes on the virus/trade updates for fresh direction.
Technical analysis
Sustained trading below a six-week-old support line, at 0.5995 now, keeps the Kiwi pair directed towards April 23 low near 0.5910.