NZD/USD’s reversal from 0.5790 extends to levels sub-0.5700
- The kiwi gives away gains on Monday and returns below 0.5700.
- Concerns about China's zero-COVID policy hurt the NZD.
- The US dollar pares losses after Friday's reversal.
The New Zealand dollar has opened the week on the back foot, retreating from two-week highs at 0.5790, reaching session lows at the 0.5655 area, with the US dollar regaining lost ground as risk appetite ebbed.
Negative reaction to Jinping’s third term
The confirmation that Xi Jinping’s secured an unprecedented third term at the Chinese presidency has hurt investors’ mood on concerns about the consequences of his zero-COVID policy. Fears that a new set of lockdowns may hurt economic growth have hammered the kiwi due to New Zealand's status as one of China’s major providers.
In the macroeconomic docket, better-than-expected Chinese Trade Balance data, which has shown a $84.74B surplus in September, beating the market consensus of $81.0B has offered a brief impulse to the Kiwi earlier today.
On the other end, the US dollar is trading moderately higher on Monday, shrugging off Friday’s weakness, in spite of the mixed US data.
The Chicago Fed National Activity Index has edged up 0.1%, against the 0.4% decline forecasted by the analysts, while the S&P PMI showed that economic activity in both, services and manufacturing sectors contracted beyond expectations in October.
Technical levels to watch