NZD/USD sellers prod 0.6200 on mixed New Zealand data, offbeat markets

• NZD/USD stretches the previous day’s losses as US Dollar grinds higher.
• New Zealand Building Permits slump in February, ANZ figures improve for March.
• US Dollar portrays quarter-end consolidation amid mixed Fed concerns, cautious optimism.
• Second-tier data, inflation and baking headlines will be the key for fresh impulse.

NZD/USD drops to 0.6200 during early Thursday while extending the previous day’s pullback from the weekly high. In doing so, the Kiwi pair justifies the broadly firmer US Dollar, as well as mixed data from New Zealand (NZ).

NZ Building Permits dropped by 9.0% in February versus an expected recovery of 0.5%, compared to -5.2% prior. However, the Australia and New Zealand Banking Group’s (ANZ) sentiment indices came in firmer for March but flashed negative prints and failed to lure the NZD/USD buyers. That said, the ANZ Activity Outlook for March improved to -8.5% versus -12.5% expected and -9.2% prior while ANZ Business Confidence also came in firmer than -47.5 market forecasts to -43.4 for the said month, versus -43.3 prior.

On the other hand, US Pending Home Sales grew 0.8% MoM in February versus -3.0% expected and 8.1% prior.

It should be noted that Fed Chair Jerome Powell’s teasing of one more rate hike joined Fed Vice Chair for Supervision Michael Barr’s emphasis on data dependency to allow the US Dollar to remain firmer. On the same line could be Fed Chair Powell’s push for alteration in deposit insurance.

Elsewhere, optimism surrounding the technology and banking sector puts a floor under the NZD/USD prices even as nuclear threats from Russia and North Korea join the US-China tussles to weigh on the risk profile amid a light calendar in Asia.

Against this backdrop, the S&P 500 Futures print mild losses around 4,050, retreating from a one-week high marked the previous day, while ignoring Wall Street’s upbeat performance. On the other hand, the US 10-year and two-year Treasury bond yields grind higher after teasing the bond buyers the previous day.

Moving on, preliminary readings of the US fourth quarter (Q4) Core Personal Consumption Expenditure (PCE) and the final numbers for the US Q4 Gross Domestic Product will be important to watch for market players. However, major attention should be given to the banking and inflation clues.

Technical analysis

NZD/USD grinds between the 50-DMA and the 21-DMA, respectively around 0.6280 and 0.6200, amid recently increasing bearish bias.