New Zealand Dollar, NZD/USD, Trade Activity, Earnings -Talking Points
- Asia-Pacific stocks set for neutral open as investors mull Fed comments
- Wall Street fell despite upbeat earnings figures from Facebook and Apple
- NZD/USD rally may extend into May with monthly gain up over 4%
Thursday’s Asia-Pacific Outlook
Asia-Pacific markets will have a plate full of economic data and central bank commentary to digest during Thursday’s trading session. Wall Street closed mostly lower following the Federal Reserve’s April policy meeting when the central bank kept its benchmark interest rate unchanged. The Dow Jones Industrial Average (DJIA) closed 0.48% lower.
Treasury yields moved lower overnight due to Federal Reserve Chair Jerome Powell’s dovish commentary following the FOMC rate decision. The central bank leader made clear that he and his colleagues are still a ways off from tapering the balance sheet, which is now approaching the $8 trillion mark. The 10-year yield sank near 1% on the day.
Despite the close lower on Wall Street, market sentiment will likely remain elevated with technology giants Apple and Facebook posting huge beats. However, Ford – the major US-based automobile manufacturer – highlighted the global chip shortage in its earnings outlook. Chief Financial Officer John Lawler forecasted the chip shortage to worsen through Q2. China’s electric vehicle maker NIO Inc. will report earnings today.
Earlier today, New Zealand reported trade data for March. According to the DailyFX Economic Calendar, exports crossed the wire at N$5.68B, up from N$4.5B, while imports hit N$5.65B, up from N$4.3B. Overall, New Zealand’s balance of trade fell to N$33m, down from N$201M. While the aggregate trade balance fell – calculated as exports minus imports – the increase in both imports and exports reflects a pickup in trade activity, which may bode well for the New Zealand Dollar.
NZD/USD Daily Chart
The New Zealand Dollar is on track to record its best monthly performance versus the US Dollar since November, currently up over 4%. NZD/USD’s rally has seen a full retracement of the swing lower from mid-March. Now, the 20-day Simple Moving Average (SMA) appears to be nearing a bullish cross above the 100-day SMA. Moreover, RSI and the MACD oscillators are both oriented higher.
NZD/USD Daily Chart
Chart created with TradingView
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--- Written by Thomas Westwater, Analyst for DailyFX.com
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