NZD/USD has been offered in sync with the decline seen in the Aussie following an unambiguously negative employment report in Australia, with the exchange rate now testing a key support at 0.7330.
Demand for NZD has been drying up in the past few hours, with traders re-thinking its intraday strategies after a dismal BNZ-BusinessNZ PMI, which declined by 6.2 point in January to 50.9 vs 57.7 prior, a reading that represented the lowest level since December 2012. BNZ economist Doug Steel said that "it certainly questions the strength of growth earlier in 2015."
Furthermore, drought has now been declared in large parts of NZ. According to Stuff news, "Minister for Primary Industries Nathan Guy has declared a drought for all of Canterbury, Central and North Otago, and Marlborough this morning. Wairarapa is on watch. Guy, who chose the Opuha Dam, 13 kilometres north of the South Canterbury town of Fairlie, as the backdrop for his announcement, said the drought is a medium-scale event."
As explained earlier on the day, NZ GDP is likely to take a hit due to the drought crisis. With inflation running low in New Zealand, any slow down in growth, may be what could potentially prompt the RBNZ to adopt a more dovish rhetoric in the months to come. There has also been some talk of additional macro-prudential tools being implemented, as the housing market, especially in Auckland and Christchurch, remains a major concern for policy-makers.
Technically, with NZD/USD now testing key support at 0.7330, Jim Langlands, Founder at FXCharts, notes: "Below that would suggest a slide to 0.7300. Further out, below 0.7300 would see a run towards minor supports at 0.7250 and 0.7225, and then further out we could then be in for another test of 0.7200 and the trend low of 0.7185." On the topside, sellers appear to be in control short term, as long as 0.74 is defended.
Demand for NZD has been drying up in the past few hours, with traders re-thinking its intraday strategies after a dismal BNZ-BusinessNZ PMI, which declined by 6.2 point in January to 50.9 vs 57.7 prior, a reading that represented the lowest level since December 2012. BNZ economist Doug Steel said that "it certainly questions the strength of growth earlier in 2015."
Furthermore, drought has now been declared in large parts of NZ. According to Stuff news, "Minister for Primary Industries Nathan Guy has declared a drought for all of Canterbury, Central and North Otago, and Marlborough this morning. Wairarapa is on watch. Guy, who chose the Opuha Dam, 13 kilometres north of the South Canterbury town of Fairlie, as the backdrop for his announcement, said the drought is a medium-scale event."
As explained earlier on the day, NZ GDP is likely to take a hit due to the drought crisis. With inflation running low in New Zealand, any slow down in growth, may be what could potentially prompt the RBNZ to adopt a more dovish rhetoric in the months to come. There has also been some talk of additional macro-prudential tools being implemented, as the housing market, especially in Auckland and Christchurch, remains a major concern for policy-makers.
Technically, with NZD/USD now testing key support at 0.7330, Jim Langlands, Founder at FXCharts, notes: "Below that would suggest a slide to 0.7300. Further out, below 0.7300 would see a run towards minor supports at 0.7250 and 0.7225, and then further out we could then be in for another test of 0.7200 and the trend low of 0.7185." On the topside, sellers appear to be in control short term, as long as 0.74 is defended.
