NZD/USD bears move in and eye a bearish close for the day
|- NZD/USD bears are in play towards the close on Wall Street.
- US Dollar remains bid in a corrective phase on Fed sentiment.
NZD/USD recovered from one-month lows this week but failed to put in a fresh high on Wednesday, with the pair travelling between a low of 0.6296 and a high of 0.6348. The markets took a dovish view on comments from U.S. Federal Reserve Chairman Jerome Powell on Tuesday that helped to lift the commodity currencies despite Friday's strong US Nonfarm Payrolls jobs data.
Overall, however, on the day, both the Kiwi and the US dollar index, DXY, are little changed with it being a calendar void of catalysts besides Federal Reserve speakers who continued to emphasise the need for monetary policy settings to remain restrictive.
Fed's John Williams reinforced that interest rates were “barely into restrictive territory”, and rates would need to stay at a restrictive level “for a few years to make sure we get inflation to 2%”. Fed's Lisa Cook argued that they “need restrictive policy for some time to cool prices”. Fed's Neel Kashkari emphasised that the “services side of the economy is still hot”, noting the lack of progress on core services inflation ex-housing. As a consequence, the US Dollar was able to run higher in the US session, sinking all ships, including NZD/USD that continues to bleed into the cash close on Wall Street.
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