NZD/USD shows exhaustion signs in the 0.6220-0.6260 area, US Michigan CSI eyed
|- NZD/USD is scaling modestly higher on weaker DXY.
- Fed Powell’s high probable dictation of two jumbo rate hikes has empowered inflationary fears.
- In today’s session, US Michigan CSI will remain in focus, which is seen at 64.
The NZD/USD pair displayed a bullish open-drive move on Friday. The pair is scaling higher swiftly right from the first opening tick at 0.6230. The kiwi bulls have witnessed an intense sell-off in the past few trading sessions and signs of exhaustion are hinting at a pullback, maybe a reversal. A consolidative move has been witnessed in a 0.6216-0.6266 range.
The odds of an extremely tight monetary policy by the Federal Reserve (Fed) are progressing each day. Fed chair Jerome Powell in his interview with Marketplace national radio program has stated that the Fed is expected to raise interest rates by half a percentage point at each of its next two policy meetings. Also, Powell added that the Fed is prepared to do more if data turns uglier.
Fed’s Powell emphasized price stability, which is necessary to keep the economy rock solid. Soaring inflationary pressures are denting the paychecks of households. Meanwhile, the US dollar index (DXY) has recorded some long liquidation after printing a fresh 19-year high of 104.92 on Thursday.
On the NZ front, investors have cheered a minor improvement in the REINZ House Price Index t -1.9% from -2.1% recorded earlier. Also, the economy reported the Business Purchase Managers Index (PMI) at 51.2, lower than the forecasts of 52.8.
Going forward, US Michigan Consumer Price Index (CSI) will be on the investors’ radar. The economic data is seen at 64 against the previous figure of 65.2.
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