NZD/USD sidelined below 0.74 ahead of New-Zealand PMI

• The NZD is being boosted by the wave of optimism from China pushing free trade. 
• The Business NZ PMI is slated at 22:30 GMT.
• Recent USD strength and positive data are not affecting the NZD/USD.

The NZD/USD is trading at around 0.7377 up 0.24% on Thursday as it is consolidating below the 0.7390 level. 

The antipodean currencies are the main beneficiaries of a wave of optimism stemming from recent comments from the Chinese President Xi Jinping. At the Boao Forum, he calmed investors about a potential trade war. He said that China will continue to gradually open its economy. He promised to open up financial services, reinforce intellectual property rights protection and liberalize restrictions on investments in the auto sector by the end of 2018. His goal is to strengthen the investment conditions in order to encourage more foreign investments in China. New-Zealand and Australia are both big trade partners with China and both currencies appreciated in the last days. 

The NZD is holding up quite well against the US dollar despite Wednesday’s US inflation data which came in-line with expectations at 2.1% for the annualized reading and exceeded the Fed’s target of 2%. Even the FOMC minutes (also on Wednesday) which were rather hawkish didn’t do much to the NZD/USD. The bulls keep the pair supported.      

Coming up next on Thursday, Neel Kashkari, a voting member on the FOMC, will deliver a speech at 19:00 GMT while in New-Zealand, the Business NZ Purchasing Managers Index (PMI) for March will be published at 22:30 GMT; previous reading in February was at 53.4. 

Meanwhile earlier on Wednesday the Reserve Bank of New-Zealand assistant governor John McDermott in a speech said: “The Reserve Bank of New Zealand may now need to give regard to employment when setting monetary policy but in reality its ability to influence trends in the jobs market is limited.” 

NZD/USD 4-hour chart

The short-term trend is up and immediate resistance is seen at 0.7390, then at 0.7438 swing high. Supports lie at 0.7344 and at 0.7323 previous swing high.