NZD/USD advances near 0.6900 ahead of China’s stimulus, Fed’s policy weighs DXY

NZD/USD has advanced near 0.6900 on the announcement of helicopter money from China.
The DXY has weakened amid risk-on impulse in the market.
Kiwi bulls got stronger on upbeat GDP numbers.

The NZD/USD pair has advanced sharply near 0.6900 on multiple positive triggers in the market. The recent resurgence of Covid-19 in China has renewed the fears of a pandemic in the world. In response to the rising cases of Covid-19, the China administration has imposed severe lockdown measures to corner the spread of the Omicron variant, detected in the Covid-19 patients. Apart from that China’s Vice Premier Liu He has signaled more stimulus to support Chinese markets.

The announcement of stimulus has brought optimism for the antipodean as New Zealand is one of the leading exporters to China.

Meanwhile, the underperformance of the US dollar index (DXY) has also underpinned the kiwi against the greenback. The DXY has plunged near 97.60 after the announcement of the interest rate decision by the Federal Reserve (Fed). Fed Chair Jerome Powell increased the interest rates by 25 basis points (bps). The announcement expanded the demand for risk-perceived assets significantly. Also, the antipodeans were trading strong when risk-sensitive assets were going through the carnage. Therefore, underperformance from the DXY firmed bids for the kiwi further.

Apart from that, the outperformance from the yearly Gross Domestic Product (GDP) numbers, which were reported on Thursday, strengthened the kiwi further. The yearly kiwi GDP landed at 3.1%, much higher than the previous print of -0.2%.

Share: Feed news

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.