The NZD/USD pair continued gaining traction through the mid-European session and touched a fresh daily high, around mid-0.7000s in the last hour.
Following the previous day's two-way price moves, the NZD/USD pair caught some fresh bids on Thursday and jumped back above the 100-day SMA amid some follow-through US dollar profit-taking. Retreating US Treasury bond yields turned out to be a key factor that prompted some USD long-unwinding for the second successive day.
This, along with a generally positive tone around the equity markets, further drove flows towards the perceived riskier kiwi. Apart from this, rising bets for yet another rate hike by the Reserve Bank of New Zealand (RBNZ) later this month acted as a tailwind and remained supportive of the strong bid tone around the NZD/USD pair.
Meanwhile, the prospects for an early policy tightening by the Fed should help limit any meaningful USD pullback. In fact, the markets have started pricing in the possibility for a rate hike by July 2022 and the Fed funds futures indicate a high likelihood of another raise by November amid worries about rising inflationary pressures.
This, in turn, might keep a lid on any further gains for the NZD/USD pair, at least for the time being, warranting some caution before placing aggressive bullish bets. Market participants now look forward to the US economic docket, featuring the release of the Philly Fed Manufacturing Index and the usual Weekly Initial Jobless Claims.
Traders will further take cues from the US bond yields and a scheduled speech by New York Fed President John Williams, which might influence the USD and provide some impetus to the NZD/USD pair. Apart from this, the broader market risk sentiment could further produce some meaningful trading opportunities around the NZD/USD pair.
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.