Market news
26.04.2023, 13:29

NZD/USD bounces off its lowest level since March amid notable USD supply

  • NZD/USD remains under some selling pressure for the second straight day.
  • The downside seems cushioned amid the emergence of fresh USD selling.
  • The upbeat US data fails to impress the USD bulls or provide any impetus.

The NZD/USD pair drifts lower for the second straight day on Wednesday and drops to its lowest level since March 10 during the early North American session. The pair, meanwhile, react little to the upbeat US macro data and bounces to the 0.6135-0.6140 region in the last hour amid the emergence of fresh US Dollar (USD) selling.

In fact, the USD Index, which tracks the Greenback against a basket of currencies, erases a major part of the overnight gains and turns out to be a key factor lending some support to the NZD/USD pair. A slight improvement in the global risk sentiment - as depicted by a goodish recovery in the US equity markets - is seen as a key factor weighing on the safe-haven buck. The USD bulls fail to gain any respite following the better-than-expected release of US Durable Goods Orders and a modest uptick in the US Treasury bond yields.

fresh concerns about the regional banking sector crisis in the US, along with the possibility of an imminent recession and worries about the US debt ceiling, have been fueling speculations that the Federal Reserve (Fed) will cut interest rates later this year. The Fed, however, is still expected to hike interest rates by 25 bps in May, which, along with fears about economic headwinds stemming from rising borrowing costs could help limit the downside for the USD. This, in turn, is seen as a key factor exerting pressure on the NZD/USD pair.

Bearish traders, meanwhile, might wait for a sustained break through the 0.6100 mark and some follow-through selling below the YTD low, around the 0.6085 region touched in March before placing fresh bets. The focus now shifts to the release of the US Q1 GDP report on Thursday and the US Core PCE Price Index - the Fed's preferred inflation gauge on Friday. This will play a key role in influencing the near-term USD price dynamics and help investors to determine the next leg of a directional move for the NZD/USD pair.

Technical levels to watch

 

© 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.

AML Website Summary

Risk Disclosure

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.

Privacy Policy

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.

Bank
transfers
Feedback
Live Chat E-mail
Up
Choose your language / location