NZD/USD edge higher towards 0.6330s after dismal NZ consumer sentiment and a weak US dollar
|- The NZD/USD remains within familiar levels, though up by 0.12%.
- Worst than expected NZ consumer sentiment, put a lid on the NZD/USD.
- An upbeat market mood kept the greenback on the defensive.
The New Zealand dollar gains some ground vs. the greenback on Tuesday as the New York session begins to wane. The NZD/USD is up by 0.12% after reaching a daily high of around 0.6363 but failed to break resistance near 0.6370, opening the door for a pullback. At the time of writing, the NZD/USD is trading at 0.6336.
NZ Consumer sentiment plunges, though the NZD/USD stayed afloat
A risk-on mood keeps the greenback heavy. US equities are set to finish the day higher, between 2.41% and 2.93%. Meanwhile, the NZD/USD struggled to push higher, courtesy of June’s dismal NZ Consumer confidence, which plummeted to the lowest level on record, falling from 92.1 to 78.7.
“The combination of rising mortgage rates and increases in living costs has already taken a large bite out of disposable incomes. And with interest rates set to rise even further, many households will find the pressure on their finances becoming more intense over the coming months,” Westpac analysts wrote.
In the meantime, the US economic docket featured some Fed officials crossing wires. Thomas Barkin, Richmond’s Fed President, said he decided on 75 bps in June on the University of Michigan (UoM) Consumer sentiment and inflation expectations reports. Furthermore, he added that 50 or 75 bps in July are reasonable and commented that inflation would go down once supply chain issues are resolved.
Earlier, the Chicago Fed National Activity Index for May came at 0.01, the lowest in eight months, trailing April’s 0.40. Of late, US Existing Home Sales dropped by 3.4% to 5.41 million in May 2022, the lowest level since June 2020.
In the week ahead, traders should prepare for Fed Chair Jerome Powell’s appearance at the US Senate Banking Committee, where senators would question him regarding the status of the US economy.
Key Technical Level
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