NZD/USD depreciates amid risk aversion due to geopolitical tensions, trades below 0.5900
|- NZD/USD extends its losing streak as traders adopt cautious stance amid anticipation of Israel's response to Iran's assault.
- US Retail Sales (MoM) rose by 0.7% in March, against the expected 0.3% and 0.9% prior.
- US Dollar extends gains on amplified expectations of the Fed maintaining higher policy rates for an extended period.
NZD/USD depreciates to near 0.5880 during the Asian trading session on Tuesday, as investors turn toward the US Dollar (USD) seeking refuge amid escalated geopolitical tensions in the Middle East. Traders await Israel’s response to Iran’s airstrike over the weekend. Additionally, traders are awaiting New Zealand's Consumer Price Index (CPI) data for the first quarter of 2024, scheduled for release on Wednesday. Market expectations suggest a slight uptick to 0.6% quarter-on-quarter, compared to the previous period's 0.5%.
The Chinese and Iranian foreign ministers recently engaged in a phone conversation, during which the Iranian foreign minister conveyed Iran's willingness to exercise restraint and expressed no desire to escalate the current situation further, as per Chinese state media. Additionally, China vehemently condemns and firmly opposes the recent attack on the Iranian embassy in Syria, deeming it a serious breach of international law and categorizing it as 'unacceptable'.
The New Zealand Dollar (NZD) fails to take any response from the mixed Chinese data, considering the two nations are close trading partners. China’s Gross Domestic Product (GDP) rose by 1.6% QoQ in the first quarter of 2024, against the previous quarter’s increase of 1.0%. GDP year-over-year rose by 5.3%, exceeding the expected 5.0% and 5.2% prior. Meanwhile, China’s Industrial Production (YoY) increased by 4.5% in March, against the market expectations of 5.4% and 7.0% prior.
On the other side, the US Dollar (USD) gained strength as Retail Sales surpassed expectations, denting hopes for potential monetary policy easing by the Federal Reserve (Fed). March's Retail Sales (MoM) surged by 0.7%, outpacing forecasts of 0.3%. February's figure was also revised upward from 0.6% to 0.9%. The Retail Sales Control Group climbed by 1.1%, marking a substantial increase from the previous 0.3%. Investors are now eyeing upcoming US housing data due on Tuesday, as well as Fed Chair Jerome Powell's speech at the Washington Forum.
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.