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NZD/USD last trades at $0.6520, 8 pips worse...>

KIWI
KIWI: NZD/USD last trades at $0.6520, 8 pips worse off. The first leg lower
occurred as ANZ changed their RBNZ call, they now exp. three more 25bps cuts
(tomorrow, in Sep & in Nov) rather than the prior two. The second downleg was
driven by the U.S. Tsy's decision to designate China as an FX manipulator, which
delivered a blow to risk appetite. NZD/USD has moved away from lows since.
- Participants are on the lookout for NZ labour mkt report for Q2, due in half
an hours' time. NZ 2-year inflation exp. comes out later today.
- Bears look for a fall below the $0.6800 mark, which would return focus to the
YtD low of $0.6482. Below there opens the trendline support at $0.6482. Topside
attention is drawn to the lower 1.0% 10-DMA envelope, which has limited gains
recently & comes at $0.6529. Above would expose the May 27/28 highs at $0.6559.
- This comes after escalating U.S.-China trade war weighed on the pair on
Monday, with a breach of 7.0 by USD/yuan crosses accelerating decline. However,
most losses were recouped thereafter and NZD/USD finished just 8 pips lower.
- The RBNZ is set to deliver its MonPol decision tomorrow, while NZ focus on
Thursday and Friday will fall on China's trade balance & CPI respectively.

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