NZD/USD: drifts further to the downside post Fed Evans

Currently, NZD/USD is trading at 0.7223, down -0.11% on the day, having posted a daily high at 0.7239 and low at 0.7221.

NZD/USD has continued to drift to the downside in early Asia, with the dollar picking up a bid while markets take the Fed's sincerity as sentiment for continued growth in the US economy. Rising inflation is to be expected towards the Fed's target and yet further rate hikes before the year is out propping up yields nd the dollar. 

Fedspeak: continued growth in the economy - Nomura

The Kiwi, on the other hand, struggle in an environment where the RBNZ and Fed continue to diverge and the recent GDP results for NZ were a surprise to the downside that has damaged the kiwi's profile. 

Evans was also just crossing the wires:

  • If wages growing more would think econ more.
  • Fed evans q&a: real economy doing 'quite well'.
  • Support 'very gradual' hikes, bal sheet reduction.
  • See downside risks to inflation outlook.
  • Inflation view less sanguine than fomc median. 
  • More accommodative policies reduce risk of near-0 rates .
  • Must assure public 2% inflation target not a ceiling .
  • Slow removal of accommodation needed to hit infllation target.
  • 2, 3 or 4 rate hikes this yr 'small difference'.

NZD/USD levels

Due to the recent GDP miss and tody's extension in the upside in the greenback, the bird remains anchored around below the 0.7250 mark guarding 0.7280 upside target. To the downside, 0.7220 guards 0.7145 and a break back below 0.7080/90 are key near-term downside areas. On the wide, the 0.7375 YTD highs are a key target to the upside and to the downside, a break below 0.7080/00 opens 0.6970.
 

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