Ella 
NZD/USD rose for a seventh day in a row on Thursday, setting a new near five-week high during the Asian session. However, spot prices remain capped near the 0.6200 mark and have retreated a few points over the past hour on the emergence of USD buying.
Minutes of the January FOMC policy meeting released on Wednesday showed that policymakers were worried about cutting interest rates too quickly. This remains supportive of rising US Treasury yields and supports the US dollar, which in turn is bearish for the NZD/USD pair. Nonetheless, the positive tone in equity markets dampened any meaningful appreciation moves for the safe-haven green card and provided some support to the risk-sensitive New Zealand dollar.
The New Zealand dollar (NZD) has also benefited from recent comments from Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr, further fueling speculation that the central bank will delay cutting its benchmark interest rate. Orr said inflation was moving in the right direction, but there was more work to be done to get inflation expectations truly anchored at the 2% level. The latest survey showed two-year inflation expectations rising to 3.2%, compared with a previous forecast of 3.0% growth.
Meanwhile, NZD/USD bulls appeared unaffected by weak New Zealand trade balance data, which showed a deficit of NZ$976 million in January, compared to NZ$368 million the previous month. This in turn suggests that the path of least resistance for spot prices remains to the upside and supports the prospect of a continuation of the more than week-long uptrend that began above 0.6000. Nonetheless, further escalation of conflict in the Middle East may curb further gains in spot prices.
Looking ahead, traders now look forward to U.S. economic data – with weekly jobless claims, flash PMI and existing home sales data typically released later in the North American session. In addition, Federal Reserve Governor Philip Jefferson’s scheduled speech and U.S. bond yields will also affect U.S. dollar price dynamics. This, along with broader risk sentiment, could provide some momentum for the NZD/USD pair and create short-term opportunities.
