US dollar strength continued as the market adjusted to the Fed’s more hawkish guidance. Strong NZ GDP data failed to support the kiwi. Economists at ANZ Bank expect further dollar’s appreciation in the near-term, providing selling opportunities in NZD/USD.
The dollar has been extending its gains in a long reaction to the Fed
“Despite strong NZ Q1 GDP, the kiwi remained under pressure as USD strength dominated across the board. A growing conviction that the Fed will move on rates soon into the expansion and cap burgeoning inflation pressures is supporting the USD. Inflation expectations have also eased back in reaction to the Fed’s updated guidance, which is an additional positive for the greenback.”
“The USD’s rise may run further near-term and it is likely that scheduled Fed speakers over the coming week will echo a more hawkish tone.”
“In the short-term, rallies in NZD/USD are selling opportunities.”
“Support 0.6950/0.6980 Resistance 0.7130/0.7160”
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