- NZD/USD falls to near 0.5950 amid strength in the US Dollar.
- The strength of the USD Index is backed by a strong US economy.
- The NZ economy grew at a robust pace of 0.9% in the April-June quarter.
The NZD/USD pair dropped sharply to near 0.5950 after facing severe selling pressure near the psychological resistance of 0.6000. The Kiwi asset corrects as the appeal for risk-sensitive currencies weakens due to the deepening risks of a global slowdown.
S&P500 futures added decent gains in the European session, portraying some improvement in the risk appetite of the market participants while the overall market mood is still risk-off. The US Dollar Index (DXY) jumps to a near six-week high of around 105.80 as the US economy is resilient in comparison with European and Asian economies.
China’s property sector remained vulnerable as households postponed fresh demand for real estate due to the rising jobless rate and deteriorating demand environment. The Chinese economy is exposed to upside deflation risks while European economies are struggling to bear the consequences of high inflation.
On the other hand, the US economy is materially strong backed by easing inflation, steady labor demand, decent wage growth, and robust consumer spending. Meanwhile, investors shifted focus to the US Durable Goods Orders for August, which will be published on Wednesday.
On the New Zealand front, the growth rate in the April-June quarter remained upbeat despite higher interest rates by the Reserve Bank of New Zealand (RBNZ). The Q2 Gross Domestic Product (GDP) grew by 0.9% vs. estimates of 0.5%. In the January-March quarter, the economy remained stagnant. The annual Q2 GDP rose at a slower pace of 1.8% vs. Q1 GDP growth at 2.2% but outperformed expectations of a 1.2% growth rate.
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.
Recommended content
Editors’ Picks
EUR/USD extends decline to fresh weekly lows
EUR/USD dips further below the 1.0900 mark, posting fresh weekly lows as the US Dollar finds market favor ahead of the weekly close. The USD gains on a cautious mood as speculative interest awaits comments from Fed Chair Powell and the ISM Manufacturing PMI.
GBP/USD eases below 1.2650 as the US Dollar gathers pace.
GBP/USD continues to retreat, trading below the 1.2650 in the European session on Friday. The US Dollar follows Treasury yields for direction, while the British Pound found support on hawkish BoE comments. All eyes are on US ISM PMI and Powell.
Gold under mild pressure and below $2,040
Gold price (XAU/USD) slips below $2,040, giving up some of its intraday gains, but retaining most of its weekly gains. Caution ahead of first-tier events maintains investors away from the bright metal.
Bitcoin less than 21,000 blocks away from fourth halving, financial advisors await Spot ETF approval
Bitcoin is inching closer to the anticipated fourth halving event, scheduled for April 17, 2024, tentatively. BTC price is likely to rally to its $40,000 target; analysts consider this level a “magnet” for Bitcoin.
Weekly focus: Disinflation continues
This week, inflation came in below expectations in the euro area and the US. In the euro area, headline inflation fell much more than expected to 2.4% y/y (consensus: 2.7% y/y) in November from 2.9% in October.