NZD/USD Strengthens But Lacks Follow-Through Buying Following Breakout Above 0.5900

The US dollar weakened during Monday’s Asian session, with NZD/USD attracting some dip buying around 0.5880 but lacking bullish conviction. NZD/USD is currently trading around the 0.5900 round figure, still very close to the lowest level since early May hit last Thursday.

The U.S. PCE price index released on Friday added to recent signs of easing price pressures and reaffirmed bets that the Federal Reserve (FED) will begin cutting interest rates in December. This, in turn, has dragged U.S. Treasury yields to near two-week lows, coupled with a boost in risk appetite, putting U.S. dollar bulls on the defensive and becoming a key factor supporting NZD/USD.

Still, ongoing concerns about a slowdown in China, the world’s second-largest economy, are likely to continue to act as headwinds for ANZ currencies, including the New Zealand dollar. In addition, rising bets on an early interest rate cut by the Reserve Bank of New Zealand (RBNZ), coupled with a weak consumer price index report released last week, are also weighing on NZD/USD. Investors therefore need to exercise caution before setting up positions for further gains.

Traders may also avoid making aggressive directional bets, preferring to await the outcome of Wednesday’s two-day Federal Reserve policy meeting. The much-anticipated Federal Reserve interest rate decision, as well as important U.S. macro data released at the beginning of the month, including the non-farm payrolls report, will play a key role in influencing the recent U.S. dollar price dynamics. This in turn will therefore provide some significant momentum to NZD/USD.

NZD latest articles

Popular exchange rates

foreign exchange

fxcurrencyconverter is a forex portal. The main columns are exchange rate, knowledge, news, currency and so on.

© 2023 Copyright fxcurrencyconverter.com