Foreign exchange - NZD/USD hits 1-month lows amid progress, Center East considerations

Kiwi drops against greenback in risk-off trade

Investing.com – The New Zealand dollar declined to one-month lows against its U.S. counterpart on Wednesday, as concerns over Chinese growth and tensions in the Middle East continued to weigh on market sentiment.

hit 0.6634 during late Asian trade, the pair’s lowest since December 9; the pair subsequently consolidated at 0.6653, declining 0.73%.

The pair was likely to find support at 0.6592, the low of December 9 and resistance at 0.6762, Tuesday’s high.

The New Zealand dollar remained under pressure since data released from China on Monday showing that manufacturing activity contracted for the tenth straight month in December rekindled fears over a China-led slowdown in global growth.

China is New Zealand’s second biggest export partner.

China injected 130 billion yuan into the banking system on Tuesday to stabilize its equity and currency markets, which recorded the worst opening day’s trade in years in the previous session, but investors remained cautious.

Earlier Wednesday, data showed that ticked down to 50.2 in December from 51.2 the previous month, disappointing expectations for a rise to 52.3.

Markets sentiment was also hit by the growing rift between Iran and Saudi Arabia, following the execution of a prominent Saudi Shia cleric.

Meanwhile, investors were eyeing the release of U.S. employment and trade balance reports, as well as the minutes of the Federal Reserve’s most recent policy meeting due later in the day, for potential hints on the U.S. central bank’s next steps.

The kiwi was steady against the Australian dollar, with at 1.0677.

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Foreign exchange - NZD/USD hits 1-month lows amid progress, Center East considerations