NZD/USD – New Zealand dollar close to 7-month low on trade jitters, business pessimism

The New Zealand dollar is steady on Thursday, after considerable losses on Wednesday. In North American trade, NZD/USD is trading at 0.6507, down 0.07% on the day. On the release front, New Zealand released the annual budget. In the U.S., U..S Preliminary GDP came in at 3.1%, matching the forecast.

With the trade war between the U.S. and China in full swing, it’s no surprise that the business sector in New Zealand is deeply pessimistic about economic conditions. China is a major trading partner, with some 25% of New Zealand exports going to the Asian giant. The ANZ Business Confidence survey remains mired deep in negative territory. Still, the indicator moved slightly higher in May, good enough for a 3-month high. Meanwhile, the semi-annual RBNZ Financial Stability Report stated that financial risks had not increased since the last report in November. The bank circled high consumer debt and New Zealand’s exposure to global developments as the main points of concern.

The U.S. economy continues to perform well, as growth remains above the 3.0% level. The second estimate GDP showed  a gain of 3.1%, matching the estimate. This was just shy of the initial estimate in April, which came in at 3.1%. The U.S. economy is firing on all cylinders while New Zealand’s growth has been dampened by the slowdown in China, a key trading partner. Investors are understandably wary about the kiwi, which has fallen below 0.65 on Thursday. Last week, NZD/USD touched a low of 0.6581, its lowest level since late October.

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NZD/USD Fundamentals

Wednesday (May 29)

• 22:00 New Zealand Annual Budget Release

Thursday (May 30)

• 8:30 US Preliminary GDP. Estimate 3.1%. Actual 3.1%
  
• 8:30 US Goods Trade Balance. Estimate -72.0B. Actual -72.1B
• 8:30 US Preliminary GDP Price Index. Estimate 0.9%. Actual  0.8%
• 8:30 US Preliminary Wholesale Inventories. Estimate 0.2%. Actual 0.7%
• 8:30 US Unemployment Claims. Estimate 216K. Actual 215K
  
• 10:00 US Pending Home Sales. Estimate 0.9%. Actual -1.5%
  
• 10:30 US Natural Gas Storage. Estimate 98B. Actual 114B
  
• 11:00 US Crude Oil Inventories. Estimate -0.9M. Actual -0.3M
  
• 12:00 US FOMC Member Clarida Speaks

*All release times are DST

*Key events are in bold

NZD/USD for Thursday, May 30, 2019

NZD/USD May 30 at 12:05 DST

Open: 0.6511 Low: 0.6528 High: 0.6495 Close: 0.6507

NZD/USD Technical

NZD/USD posted slight gains in the Asian session. The pair recorded small gains in the European trade but then retracted. In the North American session, NZD/USD is down slightly

• 0.6424 is providing support
• 0.6539 is the next resistance line
• Current range: 0.6424 to 0.6539

Further levels in both directions:

• Below: 0.6424, 0.6348 and 0.6237
• Above: 0.6539, 0.6607, 0.6699, and 0.6793

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