NZD/USD gives up gains as US Dollar recovers some initial losses, Fed Powell’s speech eyed

NZD/USD surrenders intraday gains as the US Dollar recovers some of its initial losses.
Investors look for fresh cues on the Fed’s monetary policy outlook after soft US inflation and the US-China trade truce.
US President Trump keeps criticising Fed Powell for not bringing interest rates down.

Sagar Dua FXStreet

The NZD/USD pair gives back its intraday gains and ticks lower to near 0.5935 during North American trading hours on Wednesday. The Kiwi pair corrects as the US Dollar (USD) recoups some of its intraday losses. The US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, recovers from the intraday low of 100.30 to near 100.70.

The US Dollar has underperformed earlier in the day due to softer-than-expected United States (US) Consumer Price Index (CPI) data for April. The US headline CPI rose moderately by 2.3%, the lowest level seen since February 2021.

Meanwhile, the next trigger for the US Dollar will be the speech from Federal Reserve (Fed) Chair Jerome Powell, which is scheduled for Thursday. Investors would like to know whether the Fed has turned dovish on the interest rate outlook in the wake of cooling inflationary pressures and the agreement between the US and China to reduce tariffs by 115% for 90 days.

On Tuesday, US President Donald Trump criticized Fed Powell again for not lowering interest rates despite the easing prices of a significant number of goods.

"No Inflation, and Prices of Gasoline, Energy, Groceries, and practically everything else, are DOWN!!! THE FED must lower the RATE, like Europe and China have done," Trump said in a post on Truth Social and added, "What is wrong with Too Late Powell? Not fair to America, which is ready to blossom? Just let it all happen, it will be a beautiful thing!”.

On the New Zealand Dollar (NZD) front, the currency is expected to be driven by market expectations for the Reserve Bank of New Zealand’s (RBNZ) interest rate decision in the monetary policy later this month. The RBNZ is expected to lower its Official Cash Rate (OCR) amid uncertainty over the domestic outlook.

Economic Indicator

Fed's Chair Powell speech

Jerome H. Powell took office as a member of the Board of Governors of the Federal Reserve System on May 25, 2012, to fill an unexpired term. On November 2, 2017, President Donald Trump nominated Powell to serve as the next Chairman of the Federal Reserve. Powell assumed office as Chair on February 5, 2018.

EUR/USD flirts with yearly lows in the sub-1.1600 area

EUR/USD adds to Monday’s heavy losses and breaks below the key 1.1600 support on Tuesday, putting the YTD lows around 1.1570 to the test. The pair’s deep pullback comes as the US Dollar extend its strong bounce, always propped up by the intense flight-to-safety environment.

GBP/USD attacks 1.3300, refreshing three-month lows

GBP/USD is deep in the red near 1.3300, accelerating its downside to renew three-month lows in European trading on Tuesday. The ongoing escalation in the Iran war, combined with rising Oil prices, weighs negatively on the higher-yielding Pound Sterling as the US Dollar capitalizes on increased haven demand.

Gold remains offered around $5,170

Gold comes under renewed and marked selling pressure on Tuesday, hovering around the $5,170 mark per troy ounce and reversing four consecutive daily advances. The yellow metal’s bearish tone comes on the back of the increasing demand for the Greenback at the time when investors continue to trim bets on further Fed rate cuts.

Crypto Today: Bitcoin, Ethereum, XRP pull back as sentiment remains in extreme market fear

The cryptocurrency market is broadly in the red on Tuesday as the Middle East grapples with an escalating war. Bitcoin (BTC) is in a pullback, trading below $67,000 at the time of writing, and most altcoins follow suit.

Middle East conflict ramps up a gear as energy price spike rips through markets

It’s another risk off day as geopolitical headwinds continue to batter financial markets. Although markets calmed during the US session and US stocks managed to post gains on Monday, this has not fed through to the European session, and stocks and bonds are sharply lower for a second day.

Hyperliquid Price Forecast: HYPE rises on commodities demand amid US-Iran war

Hyperliquid (HYPE) steadies above $33 at press time on Tuesday, marking its fourth consecutive day of recovery in a broadly volatile market due to the ongoing US-Israel strikes on Iran.