- NZD/USD picks up bids to refresh intraday high, snaps two-day downtrend near the multi-month low.
- RBNZ’s Orr signals a little more to do; NZ FinMin sees gradually easing inflation.
- A pause in the risk-off mood also favor corrective pullback amid a quiet session.
- US data, risk catalysts will be crucial for fresh impulse as buyers are far from taking control.
NZD/USD consolidates recent losses around the lowest level since March 2020, up 0.75% intraday near 0.5680, as it snaps a two-day downside during Tuesday’s Asian session.
The quote’s latest rebound could be linked to the light calendar and comments made by Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr and New Zealand's Finance Minister (FinMin) Grant Robertson.
Earlier in the day, RBNZ’s Orr said that the central bank still had some work to do but the tightening cycle was already very mature. After him, "The global economy is a tough place to be at the moment. There are still issues coming out of Europe, obviously, with the war in Ukraine, issues in China," NZ FinMin Robertson said in an interview on state-owned TVNZ, per Reuters.
Also helping the NZD/USD buyers could be the recently softer US data and inflation expectations that raised questions on the hawkish Fedspeak.
That said, Chicago Fed National Activity Index weakened to 0.0 in August versus 0.09 market expectations and an upwardly revised prior reading of 0.29. Further, the US inflation expectations as per the 10-year and 5-year breakeven inflation rates per the St. Louis Federal Reserve (FRED) data, signaled that the gauges refreshed the multi-day low on Monday. While noting the details, the longer-term inflation expectations dropped to the lowest level since July 13, 2022, whereas the 5-year benchmark slumped to the lowest levels since June 2021 with the latest figures being 2.32% and 2.33% respectively.
With this, US Treasury yields retreat from the multi-year high while the S&P 500 Futures also print mild gains by the press time.
However, the market’s anxiety remains intact amid fears of multiple central banks’ actions to tame the heavy slump of respective currencies like the GBP/USD.
Also important will be US CB Consumer Confidence for September and Durable Goods Orders for August.
Also read: US Consumer Confidence Preview: Near-term relief or more risk aversion?
Technical analysis
Although oversold RSI triggered the NZD/USD pair’s rebound, the support-turned-resistance line from May 12, around 0.5900 by the press time, holds the key to the buyer’s conviction.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD defends 0.6400 after Chinese data dump
AUD/USD has found fresh buyers near 0.6400, hanging near YTD lows after strong China's Q1 GDP data. However, the further upside appears elusive amid weak Chinese activity data and sustained US Dollar demand. Focus shifts to US data, Fedspeak.
USD/JPY stands tall near multi-decade high near 154.50
USD/JPY keeps its range near multi-decade highs of 154.45 in the Asian session on Tuesday. The hawkish Fed expectations overshadow the BoJ's uncertain rate outlook and underpin the US Dollar at the Japanese Yen's expense. The pair stands resilient to the Japanese verbal intervention.
Gold: Buyers take a breather below $2,400 amid easing geopolitical tensions
Gold price is catching a breath below $2,400 in Asian trading on Tuesday, having risen over 1% in the US last session even on a solid US Retail Sales report, which powered the US Dollar through the roof. Easing Middle East geopolitical tensions and strong Chinese data could cap Gold's upside.
SOL primed for a breakout as it completes a rounding bottom pattern
Solana price has conformed to the broader market crash, following in the steps of Bitcoin price that remains in the red below the $65,000 threshold. For SOL, however, the sensational altcoin could have a big move in store.
Israel-Iran military conflict views and takeaways
Iran's retaliatory strike on Israel is an escalation of Middle East tensions, but not necessarily a pre-cursor to broader regional conflict. Events over the past few weeks in the Middle East, more specifically this past weekend, reinforce that the global geopolitical landscape remains tense.