- Dovish RBNZ outlook triggers some initial weakness during the Asian session.
- The downtick turns out to be short-lived as 25bps rate cut is already priced in.
- The intraday up-move seemed unaffected by a follow-through USD recovery.
The NZD/USD pair built on its post-RBNZ positive momentum and climbed further beyond mid-0.6600s to hit near three-week tops in the last hour.
The pair initially slipped to sub-0.6600 level in a knee jerk reaction to dovish forward guidance by the Reserve Bank of New Zealand (RBNZ) - leaving doors open for an eventual rate cut, before moving back into positive territory for the eighth consecutive session.
Given that a 25 bps rate cut is largely priced in, the downtick lacked any strong follow-through rather was quickly bought into. The pair witnessed a dramatic turnaround and extended the momentum through the early European session, shrugging off a follow-through US Dollar uptick.
The greenback built on the overnight goodish bounce from multi-month lows - triggered by not so dovish comments by St Louis Fed President James Bullard and the Fed Chair Jerome Powell, and was further supported by recovering US Treasury bond yields, though did little to hinder the positive momentum.
Moving ahead, market participants now look forward to the US economic docket - featuring the release of durable goods orders, for some meaningful impetus later during the early North-American session. The key focus, however, will remain on the upcoming Trump-Xi meeting on the sidelines of G20 summit later this week.
Technical levels to watch
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 hovers around 1.0700 after German IFO data
EUR/USD stays in a consolidation phase at around 1.0700 in the European session on Wednesday. Upbeat IFO sentiment data from Germany helps the Euro hold its ground as market focus shifts to US Durable Goods Orders data.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold price flat lines above $2,300 mark, looks to US macro data for fresh impetus
Gold price (XAU/USD) struggles to capitalize on the previous day's bounce from over a two-week low – levels just below the $2,300 mark – and oscillates in a narrow range heading into the European session on Wednesday.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin (WLD) price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.