Being double hit by the Reserve Bank of New Zealand (RBNZ), as well as the latest manufacturing data from China, so-called kiwi dropped from previous highs, erasing large portion of previous gains on weaker greenback.
The RBNZ added to concerns over the future as it stated that even rate-cut could be a possibility. Previous liftoff series were stopped and RBNZ Deputy Governor John McDermott informed: "at present, the Bank is not considering any increase in interest rates."
Moreover, being strongly influenced by its natural largest partner – Australia, kiwi dropped on another slowdown of China's manufacturing data published by the HSBC. The gauge reached 49.2 percentage points, hinting another slowdown in the sector, pointing to likely lower demand for Australian goods, thus hurting not only Australian, but additionally also New Zealand's economy.
From the fundamental point of view, kiwi is expected to be firstly driven by greenback's strength but in case of faster recovery, we can expect the currency to strengthen against all of its major counterparts, albeit the central bank is trying to undermine its performance.
From the technical point of view, we can see TP for bears at $0.7543, nearly reach, or $0.7489, or $0.7448. As for bulls in case of short-term spike, we can expect thecurrency to reach $0.7591.
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