China is becoming the market mover by jumping the AUD/USD currency pair and NZD/USD to almost 1 percent. The Australian dollar and the New Zealand Dollar skyrocketed in today's Asian trading session (14/February), due to the circulation of the two latest news related to China.
First, US President Donald Trump is rumored to be delaying US-China negotiations for 60 days. Second, China's export data outperformed expectations. When the news is written at the beginning of the European session, both have slipped back, but still look bullish on the daily chart. The AUD/USD currency pair is sticking 0.24 percent in the range 0.7106, while the NZD/USD is up 0.42 percent in the range of 0.6825.
Trump Consider Deadline Delay Up to 60 Days
On Tuesday, Trump has been reportedly willing to postpone the deadline for US-China trade negotiations, if both parties are close to reaching a certain agreement. Now, there are rumors that he is considering backing down the deadline which will fall on March 1, for 60 days. The US Trade Representative Office official has not responded to media clarification efforts regarding the rumors.
However, the news was quite horrendous to push the Yen to fall and bolster the Commodity Dollar in Asian trading due to increased market risk. Negotiations are still ongoing. Earlier this morning, a discussion between US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin and Deputy Prime Minister Liu He had just begun in Beijing.
China's Exports and Imports Exceed Expectations
Meanwhile, China's trade balance report for January showed a lower surplus, but surpassed the initial estimate. The surplus was caused by an increase in exports of 9.1 percent (year-on-year). The figure reversed the 4.4 percent decline in the previous period, and brushed aside forecasts for a 3.2 percent decline.China's imports also only fell 1.5 percent, instead of falling as much as 10.0 percent previously estimated. Indications of continued high demand from Australia and New Zealand's main trading partner countries play an important role in boosting the value of both currencies today.
However, Boris Schlossberg from BK Asset Management warned that data in January and February often deviated from the dynamics ahead of the Lunar New Year celebration. Therefore, analysts usually make adjustments to the trade balance data achieved in these two months. More about forex learning news like this can be accessed at Didimax, a broker website with lots of educational forex learning sources.
New Zealand Breaks Interest Rate Trimming Expectations
The New Zealand dollar rocketed almost 2 percent against the US Dollar, after the RBNZ delivered its latest policy statement that was more hawkish than expected. The New Zealand dollar rocketed nearly 2 percent against the US dollar in Wednesday's trade (13/February), after its central bank delivered a statement that aborted expectations of cutting interest rates until next year.
Previously, market participants had taken into account more dovish policy statements, so this spontaneously pushed the Kiwi to a higher level. When the news was written at the beginning of the European session, the NZD/USD exchange rate still posted an intraday increase of 1.44 percent at the level of 0.6832.
Fixed Interest Rate Until 2020
In this policy meeting, the Reserve Bank of New Zealand (RBNZ) decided to keep interest rates at 1.75 percent. In addition, RBNZ Governor Adrian Orr revealed that he expects interest rates to remain at that level during 2019 and until 2020. According to him, sluggish inflation requires a low interest rate policy, but it does not necessarily increase the need for interest rate cuts.
Globally, the monetary authorities of various countries have been increasingly cautious in raising interest rates. The reason is that there is a signal of an economic slowdown amid various uncertainties such as the US-China trade conflict and Brexit. However, there is no central bank that has said it will cut interest rates this year.
