- NZD/USD picks up bids to trim the first daily loss in three.
- Mixed sentiment, light calendar in Asia-Pacific allow Kiwi bears to take a breather.
- Yields stay depressed as banking woes, Fed’s dovish hike propel demand for bonds.
- First readings of US PMI, Durable Goods Orders should be eyed to predict the one last shot of volatile week.
NZD/USD trims intraday losses around 0.6240 during early Friday morning as market sentiment dwindles during the first loss-making day in three.
The Kiwi pair’s latest rebound could be linked to the dovish concerns surrounding the Federal Reserve’s (Fed) next move, as well as the downbeat yields. That said, the Fed’s heavy lending amid the banking rout flags fears of a ballooning Fed balance sheet, which in turn renews hawkish calls for the US central bank’s next moves. However, the mixed US data and the latest Fed statement appear to challenge the policy hawks. Also challenging the US Dollar could be the comments from key market players like DoubleLine’s Gundlach who recently reiterated his dovish bias for the US central banks.
Elsewhere, comments from US Treasury Secretary Janet Yellen and the Chair of the Basel Committee on Banking Supervision, portraying the market’s fears of banking fallouts, also weigh on the market’s mood and challenge the NZD/USD buyers. However, the recent retreat in the yields keeps the pair buyers hopeful.
In this regard, the Financial Times (FT) recently mentioned said that the head of the world’s top financial regulator, Pablo Hernández de Cos, has called for tighter rules to clamp down on risks spreading from so-called “shadow banks” to other parts of the banking system. On the other hand, US Treasury Secretary Janet Yellen said on Thursday, “China and Russia may want to develop an alternative to the US dollar,” while also showing preparedness for additional deposit actions `if warranted'.
It’s worth noting that the mixed US data also challenge the NZD/USD prices. That said, the US Chicago Fed National Activity Index (CFNAI) dropped to -0.19 in February versus 0.0 expected and 0.23 prior. Further, Weekly Initial Jobless Claims declined to 191K for the week ended on March 18, versus 192K prior and 203K market forecasts. It should be noted that the US New Home Sales rose 1.1% in February from 1.8% prior, versus 1.6% analysts’ estimation, whereas Kansas Fed Manufacturing Index for March rose to 3.0 from -9.0 prior and 6.0 expected.
While portraying the mood, the US 10-year and two-year Treasury bond yields remain depressed at around 3.38% and 3.78% respectively by the press time whereas the S&P 500 Futures struggle to copy Wall Street’s positive moves.
Moving on, NZD/USD pair traders should pay attention to the market sentiment, as well as to the US Treasury bond yields, for clear directions. Also important to watch will be the first readings of the US S&P Global PMIs for March and Durable Goods Orders for February.
Also read: S&P Global PMIs Preview: EU and US figures to shed light on economic progress
Technical analysis
NZD/USD appears lackluster inside a 100-pip area between the 21-DMA and 50-DMA, respectively near 0.6200 and 0.6300.
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 trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action.
GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday
GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance.
Gold price sits at all-time highs above $2,230, US PCE eyed
Gold price hit all-time highs at $2,236 on Thursday to finish Q1 2024 with a bang. Most major world markets, including the US are closed due to Holy Friday, leaving volatility around Gold price highly subdued. US PCE inflation and Powell are awaited.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.