NZD/USD: Depressed around mid-0.7200s even as RBNZ’s Orr tries to placate bears
- NZD/USD trims the early-week gains, holds lower grounds off-late.
- RBNZ’s Orr praised NZ central bank’s sound position, focus on inflation and employment mandate.
- Wall Street closed in red as Treasury yields regain upside momentum, US stimulus/vaccine optimism prevails.
- No major data on the calendar, risks remain on the driver’s seat ahead of Powell’s speech, US NFP.
NZD/USD remains pressured around 0.7250, after snapping a two-day winning streak the previous day, during the initial Asian session on Thursday. In doing so, the quote fails to extend the bounce off 0.7237 that trims weekly gains.
RBNZ’s Orr remains cautiously optimistic but not welcomed…
A fresh drop in the US bond prices renewed the US dollar strength and weighed on the Antipodeans on Wednesday. With this, Wall Street benchmarks closed in red and markets paid a little heed to RBNZ Governor Adrian Orr’s upbeat remarks.
In his latest comments at the economic forum hosted by Waikato University, RBNZ’s Orr talks down any impact on the New Zealand central bank’s remit due to the latest push to follow housing price and government policies. The Reserve Bank of New Zealand (RBNZ) Chief also iterated health-related economic uncertainty but ruled out any challenges to the monetary policy.
Read: RBNZ's Orr: Focussed on inflation and employment madates
It’s worth mentioning that the recently escalated chatters over US President Joe Biden’s $1.9 trillion covid relief bill, which is in the American Senate for discussion and approval, seems to have favored the bond bears off-late. Also on the same side could be the comments from the European Central Bank (ECB) board suggesting no need to worry about the reflation.
Earlier on Wednesday, US President Biden brought forward the deadline to vaccinate all American adults from previously announced July to May. Additionally, the UK’s stimulus and downbeat US data could have also added to the market sentiment off-late.
Looking forward, traders may gear-up for the key events and could turn cautious ahead of Fed Chairman Jerome Powell’s speech, with nothing major at home and aboard before that. It should, however, be noted that the passage of the US stimulus and/or coronavirus (COVID-19) updates can offer intermediate moves in the meantime.
Technical analysis
Pullback moves from 10-day SMA, currently around 0.7310, directs NZD/USD towards the south an ascending support line from December 21, at 0.7196 now.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
