NZD : Steady
(Wed, 9 Dec 2020). Asia-Pacific markets may continue the slight risk-on tilt seen in the New York trading session, but traders remain cautious as talks between the European Union and the U.K. continue without an agreement. South Korea is also continuing to battle a rise in Covid cases, with President Moon Jae-in ramping up efforts to control the spread of the virus.
China-Australia relations remain frail after Beijing continues to pressure Australia with tariffs on wine and other goods. The breakdown in relations has been an afterthought to markets overall, but further aggression between the two economies may start to creep into sentiment. Still, iron ore prices remain near seven-year highs as China imports massive amounts to fuel stimulus-driven construction and infrastructure projects.
Meanwhile, New Zealand Dollar strength has given way to relatively subdued trading action. NZD/USD reached new multi-year highs earlier this month following an impressive rally in the Kiwi. If current indecision turns into near-term bearishness, early 2019 highs - directly below the 0.70 handle - may offer new support. Momentum appears well-positioned with its MACD line accelerating relative to the signal line.
AUD/NZD is trading lower after the recently formed Death Cross in the pair – see chart below. The New Zealand Dollar may strengthen against the Australian Dollar further following the bearish omen. Moreover, the overall path lower appears likely given its recent stride of lower lows and lower highs since the 2020 swing high.
GFS ASIA TEAM
- just now