NZD/USD: RBNZ to reverse the downtrend triggered by weak Chinese data – ANZ

The kiwi is struggling under the weight of softer global sentiment. Nevertheless, that could all change tomorrow if the Reserve Bank of New Zealand (RBNZ) delivers an upbeat MPS, economists at ANZ Bank appraise.

Disappointing Chinese economic data weighed on risk appetite

“It’s difficult to pinpoint the exact catalyst, but the going seemed to get tougher for the kiwi following weaker Chinese data yesterday. ANZ also downgraded its 2021 China growth forecasts (from 8.8% YoY to 8.3% YoY) and by association, that has potential to weigh on NZD sentiment.”

“The next few days are all likely to be about the RBNZ. We’ve discussed this at length – a hike is coming – it’s just a question of how big, and how many are projected to follow it. That will in turn put carry back on the table for the NZD, and it’s this that could suddenly be the focus, not just for spot markets, but for bond investors too. Buckle in for the ride.”

“Support 0.6760/0.6900 Resistance 0.7100/0.7170”