NZD/USD rallies above the 200-DMA and 0.6300 on a soft US Dollar
|- Dovish speech of the Federal Reserve Chair Jerome Powell weighed on the US Dollar.
- Fed’s Powell opened the door for a 50bps rate hike in the December meeting.
- The New Zealand Dollar ignored a worse-than-expected Business Confidence report, as shown by the NZD/USD rising.
The New Zealand Dollar (NZD) soars sharply against the US Dollar (USD), towards the 200-day Exponential Moving Average (EMA) at 0.6290, following a speech of the US Federal Reserve (Fed) Chair Jerome Powell on Wednesday. At the time of writing, the NZD/USD is trading at 0.6302.
Sentiment shifted positively on dovish remarks by the Fed Chair Jerome Powell, who opened the door for slower rate hikes, since December. In his speech, Fed Chair Powell said that moderating interest-rate increases made sense and could happen as soon as the December meeting. The US central bank Chair added that rates would get higher than projected in September and remain restrictive for “some time.”
Following the Fed Chair Powell speech, money market futures odds for a 50 bps rate hike lie at 75%, while there is a 25% chance of 75. Meanwhile, swaps futures expect the Federal Funds rate(FFR) to peak under 5% by May 2023.
Also read: Breaking: Fed chair Powell speech sends US Dollar lower
On the New Zealand front, the economic docket featured Business Confidence for November, which dropped to -57.1 in November 2022 from -42.7 in October, as firms continued to grapple with intense inflationary pressures, declining margins, labor shortages, and tightening financial conditions. Activity measures were generally lower, led by sharp falls in ease of credit, profit expectations and own activity outlook.
NZD/USD Key Technical Levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.