NZD/USD faces some downside risk over the near-term – HSBC

FXStreet Team FXStreet

The global economic recovery will continue to be the driver of movements in the kiwi. Furthermore, RBNZ's upcoming monetary policy meeting on 12 August is likely to provide a check on the near-term strength in the NZD, according to economists at HSBC.

Key quotes

“For the NZD specifically, the low virus transmission numbers are a mixed blessing for the economy. While it does allow the domestic economy to get back on track faster, it also means that international borders look set to remain closed for a prolonged period of time, likely longer than those countries hit harder by the virus. Faced with these complex trade offs and significant uncertainty over the future path of the virus, the FX market has chosen to largely ignore local developments and focus on global.”

“Our near-term caution on the NZD also reflects dovish risks around the RBNZ policy going into the 12 August meeting. Unlike the RBA, which appears happy to sit tight, the RBNZ has signalled that NZD strength is unwelcome and that all aspects of its policy are up for review. A wide range of options are kept open including further expansion to QE, a negative official cash rate, and even debt monetization. All of these options would be negative for the NZD.”

Author

FXStreet Team

FXStreet

EUR/USD keeps the rangebound trade near 1.1850

EUR/USD is still under pressure, drifting back towards the 1.1850 area as Monday’s session draws to a close. The modest decline in spot comes as the US Dollar picks up a bit of support, while thin liquidity and muted volatility, thanks to the US market holiday, are exaggerating price swings and keeping trading conditions choppy.

GBP/USD flirts with daily lows near 1.3630

GBP/USD has quickly given back Friday’s solid gains, turning lower at the start of the week and drifting back towards the 1.3630 area. The focus now shifts squarely to Tuesday’s UK labour market report, which is likely to keep the quid firmly in the spotlight and could set the tone for Cable’s next move.

Gold battle around $5,000 continues

Gold is giving back part of Friday’s sharp rebound, deflating below the key $5,000 mark per troy ounce as the new week gets underway. Modest gains in the US Dollar are keeping the metal in check, while thin trading conditions, due to the Presidents Day holiday in the US, are adding to the choppy and hesitant tone across markets.

AI Crypto Update: Bittensor eyes breakout as AI tokens falter

The artificial intelligence (AI) cryptocurrency segment is witnessing heightened volatility, with top tokens such as Near Protocol (NEAR) struggling to gain traction amid the persistent decline in January and February.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.