- NZD/USD tumbles below 0.6620 on souring market mood.
- Lower-than-expected inflation in NZ has brought an intense sell-off in the asset.
- The DXY has printed a fresh high at 100.33 on rising odds of Fed’s rate hike.
The NZD/USD pair has slipped below last week’s low at 0.6626 after carry-forwarding the weakness observed on Friday. The asset has recorded a sheer downside from the last two trading sessions after failing to sustain above the round level resistance of 0.6780 on multiple attempts. Risk-off market mood has dampened the demand for the risk-perceived assets, and considering the price action, a downward trending move is likely to drag the asset to near yearly lows at 0.6529.
The kiwi has been underperforming against the greenback since the release of the NZ Consumer Price Index (CPI) on Thursday. The yearly NZ CPI landed at 6.9% against the expectation of 7.1% and the previous print of 5.9%. Lower-than-expected inflation print pressured the kiwi but not lowered the odds of more rate hikes from the Reserve Bank of New Zealand (RBNZ). RBNZ Governor Adrian Orr mentioned in his last monetary policy statement that inflation is soaring high and interest rate elevation is the only measure to reduce inflation risks. Therefore, RBNZ policymakers will stick to its hawkish guidance and bring inflation below the targeted rate of 2% sooner.
Meanwhile, higher odds of a rate hike by the Federal Reserve (Fed) are pushing the US dollar index (DXY) toward the north. The DXY is comfortably auctioning above 101.00 and is expected to advance gains as investors are expecting higher Durable Goods Order this week. The monthly Durable Goods Orders are likely to land at 1% against the prior print of -2.1%. Also, investors will shed themselves behind the greenback to combat uncertainty ahead of the Fed’s monetary policy announcement in May.
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 losses toward 1.1100 on increased dovish ECB bets
EUR/USD accelerates decline toward 1.1100 in European trading on Friday. Softer French and Spanish inflation data ramped up Oct ECB rate cut bets, weighing on the Euro. However, the downside could be cushioned by a wobbly US Dollar, as US PCE inflation looms.
USD/JPY slides 1% toward 143.00 as Ishiba wins LDP leadership race
USD/JPY is seeing a fresh sell-off toward 143.00 in the European session on Friday. The pair loses over 300 pips, as the Japanese Yen rebounds on Shigeru Ishiba's win in the LDP leadership run-off. Sanae Takaichi, who favored keeping interest rates lower, was expected to win the race.
Gold price pulls back from record high ahead of US PCE Price Index, bullish bias remains
Gold price attracts some sellers on the last day of the week and retreats further from the all-time peak, around the $2,685-2,686 region touched on Thursday. The downtick is sponsored by the emergence of some US Dollar buying, which tends to undermine demand for the commodity.
US core PCE set to show continued disinflation trend, reinforcing Federal Reserve easing cycle
The core Personal Consumption Expenditures Price Index is seen rising 0.2% MoM and 2.7% YoY in August. Markets have already priced in near 50 bps of easing in the next two Federal Reserve meetings. A firm PCE result is unlikely to move the Fed’s stance on policy.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.