NZD/USD: Keeps bounce from one-week bottom above 0.6400 after PBOC rate decision
- NZD/USD snaps two-day losing streak after the PBOC announced no rate change.
- Market’s trading sentiment recently recovered amid hopes of improvement in the Sino-US relations, receding figures from Beijing.
- New Zealand Credit Card Spending, virus updates and the US-China story developments are in the focus.
NZD/USD fades the upside while easing from the intraday top of 0.6423 to 0.6415, upside 0.14% on a day, during Monday’s Asian session. Even so, the kiwi pair remains positive for the first time in three days while reversing from the one-week low.
The People’s Bank of China (PBOC) announced an interest rate decision at 01:30 GMT on Monday. The Chinese central bank marched wide market expectations of keeping the one-year Loan Prime Rate at 3.85%. During the last week, the PBOC cut its 14-day reverse repo rate in a surprise move. Following the news, NZD/USD stepped back from early-day rise but keeps the bulls hopeful amid the latest recovery in risk sentiment.
Read: PBOC leaves one-year Loan Prime Rates unchanged at 3.85% in June
The pair’s latest pullback from one-week low could be traced from US President Donald Trump’s refrain from announcing sanctions on the Chinese policymakers involved in the Xinjiang issue. Also suggesting the risk-reset could be the latest virus statistics from mainland China and Beijing.
Though, the rise in the pandemic figures from the southern states of the US and some parts of Asia keeps the fears of the virus wave 2.0 alive. Also contributing to the risk could be China’s turning down of US meat from Tyson and US Secretary of State Mike Pompeo’s discussion with allies over measures taken against the dragon nation. Furthermore, geopolitical tussles in Korea and between India and China exerts additional burden on the market’s risk-tone sentiment.
Having said that, the US 10-year Treasury yields remain pressured near 0.70% but shares in Asia and the US stock futures seem on the recovery moves off-late.
Moving on, May month Credit Card Spending from New Zealand, prior -49.4%, could offer immediate directions to the kiwi pair. However, the major attention will be given to qualitative catalysts surrounding the virus and Sino-American tension for fresh impulse.
Technical analysis
The pair’s pullback from 21-day SMA will have to cross a falling trend line from June 10, at 0.6445 now, to challenge the previous week’s top near 0.6510. Until then, bears can keep a 200-day SMA level of 0.6322 on their radars.