- NZD/USD is looking to capture 0.7000 despite the headwinds of the risk-aversion theme.
- The DXY has faced long liquidations above 99.00.
- The rising bets over a 50 bps rate hike by the Fed has failed to strengthen the greenback against the kiwi.
The NZD/USD pair looks to climb near 0.7000 as the antipodeans are outperforming the mighty greenback on rising commodity prices. The major has opened near Friday’s value area high at 0.6846 and has extended gains after overstepping Friday’s high at 0.6872. The asset is trading around 0.5% above Friday’s close at the press time.
NZD/USD has continued its three-day winning streak on upbeat commodity prices. The kiwi has been underpinned against the greenback despite rising expectations of a 50 basis point interest rate hike in March’s monetary policy meeting. Stronger-than-expected US Nonfarm Payrolls data on Friday and expectations of soaring inflation data later this week have backed an aggressive monetary policy stance next week.
It is worth noting that the Reserve Bank of New Zealand (RBNZ) has raised its official cash rate (OCR) by 75 basis points (bps) in the last five months. The RBNZ is continuously tightening the leakage of liquidity to contain the roaring inflation. This is also the major driver that has been supporting the kiwi to perform strongly against the mighty greenback despite the broad risk-aversion theme in the market.
It is likely expected that firmer commodity prices will continue to support the kiwi as the Russia-Ukraine war will keep on escalating. Russian leader Vladimir Putin seems not interested in any diplomatic solution and is resorting to war to fulfill Russia’s demands.
Meanwhile, the US dollar index (DXY) is struggling to sustain above 99.00 amid the long liquidations after a strong upside move.
This week, the US Consumer Price Index (CPI) data on Thursday will keep the investors on their toes. While, the kiwi docket will report the Business NZ PMI data, which is expected to land at 54.5 against the prior print of 52.1.
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 holds above 1.0400 in quiet trading
EUR/USD trades in positive territory above 1.0400 in the American session on Friday. The absence of fundamental drivers and thin trading conditions on the holiday-shortened week make it difficult for the pair to gather directional momentum.
GBP/USD recovers above 1.2550 following earlier decline
GBP/USD regains its traction and trades above 1.2550 after declining toward 1.2500 earlier in the day. Nevertheless, the cautious market mood limits the pair's upside as trading volumes remain low following the Christmas break.
Gold declines below $2,620, erases weekly gains
Gold edges lower in the second half of the day and trades below $2,620, looking to end the week marginally lower. Although the cautious market mood helps XAU/USD hold its ground, growing expectations for a less-dovish Fed policy outlook caps the pair's upside.
Bitcoin misses Santa rally even as on-chain metrics show signs of price recovery
Bitcoin (BTC) price hovers around $97,000 on Friday, erasing most of the gains from earlier this week, as the largest cryptocurrency missed the so-called Santa Claus rally, the increase in prices prior to and immediately following Christmas Day.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
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.