NZD/USD refreshes multi-week top, bulls now await a move beyond 0.6200 mark

FXStreet
Updated
Mitrade
coverImg
Source: DepositPhotos

■  NZD/USD scales higher for the seventh straight day and climbs to a fresh multi-week top.

■  Delayed RBNZ rate cut bets underpin the NZD, though some USD dip-buying caps gains.

■  Geopolitical tensions might further contribute to keeping a lid on any meaningful upside.


The NZD/USD pair gains positive traction for the seventh successive day on Thursday and hits a nearly five-week high during the Asian session. Spot prices, however, remain capped near the 0.6200 mark and retreat a few pips in the last hour amid the emergence of some US Dollar (USD) buying.


The minutes of the January FOMC policy meeting, released on Wednesday, showed that policymakers were concerned about cutting interest rates too quickly. This remains supportive of elevated US Treasury bond yields and underpins the buck, which, in turn, is seen acting as a headwind for the NZD/USD pair. That said, a positive tone around the equity markets keeps a lid on any meaningful appreciating move for the safe-haven Greenback and lends some support to the risk-sensitive Kiwi.


The New Zealand Dollar (NZD) further benefits from the Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr’s recent comments, which fuelled speculations that the central bank will delay cutting its benchmark rates. Orr said that inflation is moving in the right direction but there is more work to do to have inflation expectations truly anchored at that 2% level. The latest survey showed that two-year inflation expectations are seen rising to 3.2% vs a 3.0% growth estimated before.


The NZD/USD bulls, meanwhile, seem rather unaffected by weaker New Zealand Trade Balance data, which showed a deficit of NZD 976 million in January as compared to the previous month's fall of NZD 368 million. This, in turn, suggests that the path of least resistance for spot prices remains to the upside and supports prospects for an extension of over a one-week-old uptrend from mid-0.6000s. That said, a further escalation of conflict in the Middle East might keep a lid on any further gains.


Moving ahead, traders now look forward to the US economic docket – featuring the release of the usual Weekly Initial Jobless Claims, the flash PMI prints and Existing Home Sales data later during the North American session. Apart from this, Fed Governor Philip Jefferson's scheduled speech and the US bond yields will influence the USD price dynamics. This, along with the broader risk sentiment might provide some impetus to the NZD/USD pair and produce short-term opportunities.

* The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

goTop
quote
Do you find this article useful?
Related Articles
placeholder
Forex Today: US Dollar consolidates weekly gains as focus shifts to US confidence dataThe action in financial markets remain relatively subdued early Friday and the US Dollar (USD) Index consolidates its weekly gains at around 98.50.
Author  FXStreet
15 hours ago
The action in financial markets remain relatively subdued early Friday and the US Dollar (USD) Index consolidates its weekly gains at around 98.50.
placeholder
Dollar extends weekly rally as strong data delays fed cutsThe U.S. dollar looks set to record a second straight weekly rise against other major economies, driven by strong economic data that have eased worries about Fed rate cuts.
Author  Cryptopolitan
17 hours ago
The U.S. dollar looks set to record a second straight weekly rise against other major economies, driven by strong economic data that have eased worries about Fed rate cuts.
placeholder
USD/CAD trades with negative bias below mid-1.3700s, lacks bearish convictionThe USD/CAD pair drifts lower during the Asian session on Friday and moves away from a three-and-a-half-week high, around the 1.3775 region touched the previous day.
Author  FXStreet
17 hours ago
The USD/CAD pair drifts lower during the Asian session on Friday and moves away from a three-and-a-half-week high, around the 1.3775 region touched the previous day.
placeholder
US Dollar Index holds losses near 98.50 ahead of Michigan Consumer SentimentThe US Dollar Index (DXY) is retracing its recent gains from the previous session and hovering around 98.50 during the Asian hours on Friday.
Author  FXStreet
18 hours ago
The US Dollar Index (DXY) is retracing its recent gains from the previous session and hovering around 98.50 during the Asian hours on Friday.
placeholder
USD/CHF tumbles to below 0.8050 on tariff uncertaintyThe USD/CHF pair tumbles to around 0.8030 during the early European session on Friday.
Author  FXStreet
18 hours ago
The USD/CHF pair tumbles to around 0.8030 during the early European session on Friday.