NZD/USD slips on fresh trade war headlines, all eyes on China inflation data

• NZD/USD responds negatively to recent trade war news from the US.
• US delays licenses to do business with China, warns of ending trade talks, sanctions.
• China inflation data, trade headlines in the spotlight for now.

With the latest addition to the US-China trade war welcoming Asian traders on Friday, the NZD/USD pair nosedives to 0.6470.

The Kiwi pair fails to hold on to previous recovery mode after the Bloomberg came out with the news report mentioning that the US delays licenses to do business with China’s Huawei after the dragon nation stops buying agricultural products from it. There were around 50 requests for the licenses during last-week, as per the news.

It was also noted by One America News that the US is considering ending China talks, sanctions if Beijing commits Hong Kong protest crackdown.

The quote recovered half of its post-RBNZ losses after upbeat trade balance numbers from China pleased buyers.

On Thursday, the Trump administration ordered government departments not to purchase equipments from top Chinese companies, including Huawei.

Given the trade war doldrums exerting downside pressure on the Antipodeans, traders will now seek fresh clues from China’s July month inflation data, including Consumer Price Index (CPI) and Producer Price Index (PPI). It should also be noted that quarterly monetary policy statement from the Reserve Bank of Australia (RBA) will also have its impact on the Kiwi as being from the central bank of New Zealand’s largest customer.

While CPI is expected to remain unchanged at 2.7% on YoY, the MoM data could trigger the pair’s pullback if meeting +0.2% forecast versus -0.1% earlier. Further, the PPI bears the consensus to decline to -0.1% from 0.0%.

Technical Analysis

A successful break of June month low, around 0.6490, becomes necessary for the pair to rise towards July-end low of 0.6545, failing to which can recall 0.6433 and 0.6378.