- Resurgent USD demand prompted contemporary promoting round NZD/USD on Monday.
- Hawkish Fed expectations continued performing as a tailwind for the dollar.
- Merchants would possibly chorus from aggressive bets forward of the important thing FOMC choice.
The NZD/USD pair maintained its bid tone via the early North American session and was final seen buying and selling close to a multi-day low, across the 0.6775-70 area.
Having struggled to search out acceptance above the 0.6800 mark, the NZD/USD pair met with a contemporary provide on the primary day of a brand new week and was pressured by resurgent US greenback demand. Friday’s US client inflation figures bolstered expectations for an early coverage tightening by the Fed, which, in flip, continued performing as a tailwind for the USD.
Therefore, the market focus will stay glued to the result of a two-day FOMC financial coverage assembly, scheduled to be introduced on Wednesday. Within the meantime, anxiousness forward of the important thing central financial institution occasion danger saved a lid on any optimistic transfer within the markets and additional benefitted the dollar’s relative safe-haven standing in opposition to the perceived riskier kiwi.
The US central financial institution is predicted to quicken the tempo of tapering the bond purchases. Therefore, traders would search for clues concerning the Fed’s technique on rate of interest hikes amid worries concerning the persistent rise in inflation pressures. This may affect the near-term USD value dynamics and supply a contemporary directional impetus to the NZD/USD pair.
In the meantime, retreating US Treasury bond yields may maintain again the USD bulls from putting aggressive bets and lengthen some help to the NZD/USD pair, a minimum of in the meanwhile. This warrants some warning earlier than positioning for any additional depreciating transfer amid absent related market shifting financial releases from the US.
Technical ranges to look at
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