NZD/USD depreciates to near 0.6100 due to risk aversion as looming Consumer Confidence
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- NZD/USD loses ground as traders adopt cautious stance ahead of key economic data this week.
- UOB Group analysts suggest that the New Zealand Dollar is expected to consolidate within a range of 0.6100 to 0.6140.
- The US Dollar receives support from the hawkish remarks from the Fed officials.
NZD/USD extends its losses for the second successive session, trading around 0.6110 during the Asian session on Wednesday. The New Zealand Dollar (NZD) struggles possibly due to risk aversion ahead of ANZ – Roy Morgan Consumer Confidence for June due and US Gross Domestic Product (GDP) for the first quarter (Q1) are set to be released on Thursday. Furthermore, the US Personal Consumption Expenditures (PCE) Price Index will be eyed on Friday.
New Zealand's Treasury stated on Wednesday that a weak economy threatens its forecasts. The Treasury is considering additional spending and revenue solutions in response. Meanwhile, economist McLeish noted recent data suggesting economic weakness in New Zealand.
According to UOB Group analysts, the New Zealand Dollar (NZD) is expected to trade within a sideways range of 0.6100 to 0.6140 or potentially drift lower toward 0.6085.
Read the full article: The pair to trade within 0.6100/0.6140 range – UOB Group
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against the six other major currencies, extends its gains for the second successive session. The DXY trades around 105.70 with the higher 10-year yield on US Treasury bonds trading at 4.26%, at the time of writing.
Reuters cited Fed Governor Michelle Bowman repeating her view on Tuesday that holding the policy rate steady for some time will likely be enough to bring inflation under control. Meanwhile, Fed Governor Lisa Cook said it would be appropriate to cut interest rates "at some point" given significant progress on inflation and a gradual cooling of the labor market, though she remained vague about the timing of the easing.
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