Forex world

May 16, 2023

NZD/USD slips sharply below 0.625

- NZD/USD has slipped below 0.6250 as the Chinese economy showed growth in retail demand and production at a slower pace.

- S&P500 futures have increased their losses as anxiety among investors ahead of US debt-ceiling negotiations is escalating.

- The US Dollar Index has rebounded firmly above 102.40 as the risk aversion theme is gaining traction.

The NZD/USD pair has dropped below 0.6250 as the National Bureau of Statistics of China has reported weaker-than-anticipated annual Retail Sales (April) data. The economic data expanded at a slower pace at 18.4% than the forecast of 21.0% but higher than the prior release of 10.6%.

Apart from that, annual Industrial Production data (April) also landed in between the estimates of 10.9% and the former release of 3.9% at 5.6%. A slower growth rate in retail demand and Industrial Production indicates that the Chinese economy is atleast on the right track of progress after the rollback of full lockdown curbs.

It is worth noting that New Zealand is one of the leading trading partners of China and the New Zealand Dollar.

S&P500 futures have increased their losses as anxiety among investors ahead of US debt-ceiling negotiations is escalating. The overall market mood has turned cautious and the appeal for risk-perceived assets is fading away.

The US Dollar Index (DXY) has rebounded firmly above 102.40 as investors are worried that further delay in the Federal borrowing cap raise would result in default for obligated payments by the US Treasury. This will cost millions of jobs, have a huge impact on the US leadership position, and have a serious impact on overall production.

Apart from that, US Retail Sales data will be keenly watched. Monthly Retail Sales data (April) is seen expanding by 0.7% vs. a contraction of 0.6%. A recovery in retail demand could ease expectations of a pause in the aggressive rate-hike spell by the Federal Reserve (Fed).

NZD/USD



No comments:

Post a Comment