- NZD/USD has surged towards 0.6950 on Tuesday in a risk-on setting.
- The bulls are lapping up the positives from the Ukraine & Russian peace talks.
NZD/USD is trading near 0.8% higher on the day in a risk-on setting as the US dollar bleeds out following positive progress in Ukraine and Russian peace talks. The pair has rallied on Tuesday from a low of 0.6875 to a high of 0.6945 so far.
''While overall FX market volatility has been elevated (with EUR/USD surging 1½ cents before coming back a touch and USD/JPY now about 2½ cents off Monday night’s peak), AUD and NZD have been much calmer against the USD (but more volatile on crosses),'' analysts at ANZ Bank explained.
Meanwhile, Russia promised on Tuesday to scale down military operations around Ukraine's capital and north, while Kyiv proposed Ukraine join the EU while adopting neutral status by not joining NATO.
This sparked off a risk-on wave during the peace talks that are taking place in an Istanbul palace more than a month into the largest attack on a European nation since World War II. There was a heads up on Monday, however, and was something telegraphed by Financial Times Monday which had already led to an improved risk-on environment for the week.
''Talks successful enough for a possible meeting between Putin and Zelensky, says Ukrainian presidential advisor Mykhailo Podolyak. “We have documents prepared now which allow the presidents to meet on a bilateral basis," he said.
However, Russia's top negotiator has warned that there is still a long way to go until a mutually acceptable agreement with Ukraine is reached and de-escalation around Kyiv and Chernihiv does not mean a cease-fire. British Prime Minister Boris Johnson said a ceasefire agreement in Ukraine will not be enough to lift British sanctions against Russia. US president, in the same vein, says that the US will keep sanctions.
In more recent trade, Ukraine's Volodymyr Zelenskyy has said that signals from talks with Russia could be called positive, but these signals don't drown out explosions of Russian shells.
Overall, ''the NZD story is a good one, but having “gone early” with the recovery and hikes, it may not be as good as the AUD story; so, could we be in for a period of slight gains against the USD but losses against the AUD as the latter re-awakens,'' analysts at ANZ Bank said.
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
EUR/USD extends slump below 1.0500 after US PMI data
EUR/USD is under renewed selling pressure below the 1.0500 mark. EU PMI data came in better than expected but still indicate contraction in the Union. United States PMIs show a steeper contraction in the manufacturing sector yet upbeat services output in December.
Gold hovers around $2,650 as markets gear up for Fed
Gold opens the week on a moderately positive tone and trades above $2,650, favored by a mild US Dollar (USD) reversal amid lower US Treasury yields. The precious metal, however, is still close to recent lows following a 2.5% sell-off late last week.
Bitcoin rises to new all-time of $106,600, then corrects as markets focus on Fed
Bitcoin price retreats on Monday after reaching a new all-time high (ATH) of $106,648 in the early Asian session. The main factor impacting BTC price this week is likely to be the decision of the US Fed on interest rates on Wednesday.
Five fundamentals for the week: Fed dominates the last full and busy trading week of the year Premium
Christmas is coming – but there's a high likelihood of wild price action before the holiday season begins. Central banks take center stage, and there is enough data to keep traders busy outside these critical decisions.
Five fundamentals for the week: Fed dominates the last full and busy trading week of the year Premium
Christmas is coming – but there's a high likelihood of wild price action before the holiday season begins. Central banks take center stage, and there is enough data to keep traders busy outside these critical decisions.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.