NZD/USD recovers from mini-flash crash
- NZD/USD dropped 75 pips in just five minutes as dollar spiked against the Japanese yen.
- A major portion of the flash crash drop has been erased.
- Upbeat China PMI could boost risk sentiment and keep the NZD better bid.
NZD/USD has regained poise and is back above 0.60, having dropped by 75 pips from 0.6025 to 0.5950 in the five in the five minutes to 00:55 UTC.
The mini flash crash in NZD/USD and other pairs like GBP/USD and EUR/USD coincided with the sudden rise in USD/JPY from 108.16 to 108.70 seen while heading into the Tokyo daily fix.
The dollar, however, has given up a major portion of the gains in the last few minutes. The NZD/USD pair is currently trading at 0.6010 and could rise further to session highs near 0.6305 as the futures tied to the S&P 500 are signaling risk reset with a 0.45% gain.
More importantly, China's data released at 01:00 GMT showed the manufacturing activity in the world's second-largest economy rebounded sharply to expansion territory in March. The NBS Manufacturing PMI rose to 52.00, bettering the estimate of 45 by a big margin and up from the preceding month's reading of 35.7. The Non-Manufacturing PMI also rose to 52.3 from 29.6, convincingly beating the estimate of 37.8. A reading above 50 indicates expansion.
The upbeat data is likely to ease fears regarding a deeper coronavirus-led economic slowdown in China and across the globe.
Technical levels