The funny comment from Fed officials strengthened the US dollar, except against the New Zealand dollar. , US existing home sales fell, signaling an impending recession in the US. Bank of New Zealand’s upcoming monetary policy meeting sets direction for NZDUSD The New Zealand dollar (NZD) settled down and ended the week up 0.50% against the US dollar (USD), even as the Federal Reserve (Fed) strengthened the US dollar due to unusual officials due to comments (USD). In addition, positive market sentiment strengthened the riskier asset of the foreign exchange market, the New Zealand dollar. Thus, NZDUSD is trading at 0.6150, which is 0.39% higher than its opening price. FEDERAL RESERVE ADVISES MORE INTEREST RATE RAISES ARE COMING Federal Reserve officials remained vigilant during the week following weaker than expected US Consumer Price Index (CPI) and Producer Price Index (PPI) reports. i.e. inflation has slowed. However, U.S. stocks rose, while U.S. government bond yields and the U.S. dollar fell on growing speculation that the Fed may turn faster than expected. However, policy makers led by St. Louis Fed President James Bullard that interest rates are not „restrictive enough”, adding that if the federal funds rate (FFR) reaches a range of 5-5.25 percent. His comments were echoed by Minnesota Federal Reserve President Neil Kashkari, who said the one-month data cannot be too reassuring for the central bank, which it must hold until they are sure inflation has stopped. On Friday, Boston Federal Reserve President Susan Collins said the Fed should continue to raise interest rates, adding that rates will have to remain high for some time. US existing home sales fell , on a weaker US dollar , US existing home sales fell 5.9% in October, the data showed, below the .17% increase expected by analysts. Home sales have declined since February 2022 as the US Federal Reserve tightens monetary conditions to curb persistently high inflation, which has peaked around 9%. After the release, NZDUSD rallied slightly, although it returned below 0.6180 and ended the day around current rates. , NZD traders focused on RBNZ policy. New Zealand’s lack of an economic calendar has left the NZD drifting with USD dynamics and market sentiment. During the Asian session, the Covid-19 epidemic and geopolitical risk from China covered the earlier rally of NZDUSD, which decisively failed to break the psychological level of 0.6200. Next week, the New Zealand trade balance includes the October trade balance, retail sales and the RBNZ monetary policy meeting, with analysts expecting a 75 basis point rise in interest rates. On the US front The US economic calendar includes the Chicago Fed’s national activity index, durable goods orders, housing data and initial jobless claims. Other Fed officials also cross news wires. NZDUSD Price Analysis: Technical Perspective The New Zealand dollar (NZD) ended the week near lows after reaching a weekly high of 0.6203. A break in the latter leaves the NZD under selling pressure. Notably, the 0.6200 figure was tested three times, and with the Relative Strength Index (RSI) exiting overbought conditions, aiming slightly lower, a fall toward the 100-day Exponential Moving Average (EMA) at 0.6015 is on the cards. NZDUSD key support levels lie at 0.6100, followed by the downslope top-trendline of a descending channel around 0.6065, followed by the 100-day EMA at 0.6015. On the flip side, the NZDUSD’s first resistance would be the 0.6200 mark, followed by the August 25 daily high at 0.6251, ahead of the 200-day EMA at 0.6308.

Ethan Andrews

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