- Inflation in New Zealand rises to 0.6% in the second quarter.
- US Dollar Index climbs above 97, erases last week's gains.
- Retails sales data and Fedspeak will be watched closely in the second half.
Boosted by the upbeat GDP and retail sales data from China, the NZD/USD pair started the week on a strong note and advanced to its highest level since mid-April at 0.6738 during the Asian trading hours on Tuesday but struggled to preserve its bullish momentum.
The data published by the Statistics New Zealand today revealed that the Consumer Price Index (CPI) in the second quarter came in at 0.6% on a quarterly basis following the previous quarter's reading of 0.1% and improved to 1.7% on a yearly basis from 1.5%. Although these numbers came in line with the market expectation, they didn't seem to be strong enough to force the Reserve Bank of New Zealand to refrain from making a rate cut.
Commenting on the data, "This outcome should do little to alter expectations for the Bank to cut next month following a series of poor PSIs and PMIs that suggest NZ will get sub 2% growth," TD Securities analysts noted. "In terms of details, the 5.8%/q rise in fuel prices led the increase in headline inflation and rents rose +1%/q, the fastest pace since 2008.”
However, with the greenback continuing to recover the losses it suffered last week, the pair reversed its course and erased almost all of its daily gains.
Despite a lack of fundamental drivers, the US Dollar Index broke above the 97 mark and pushed higher ahead of retail sales data and speeches by FOMC members Bostic, Evans, and Chairman Powell. At the moment, the DXY is up 0.3% on a daily basis at 97.22.
Technical levels to watch for
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 retreats toward 1.0850 on renewed USD strength
EUR/USD stays under modest bearish pressure and declined toward 1.0850 in the early European session on Tuesday, pressured by the renewed USD strength. ZEW sentiment survey will be featured in the European economic docket ahead of housing data from the US.
USD/JPY extends rally beyond 150.00 as markets assess BoJ decisions
USD/JPY preserves its bullish momentum after breaking above 150.00 with the 'sell the fact' reaction to the Bank of Japan's decision to end negative interest rates. In the post-meeting press conference, Governor Ueda said they will consider options for easing broadly, including ones used in the past if needed.
Gold price struggles to lure buyers, holds steady above one-week low ahead of FOMC meeting
Gold price ticks lower amid reduced Fed rate cut bets, elevated US bond yields and stronger USD. Geopolitical tensions could lend some support to the safe-haven XAU/USD and help limit losses.
Why is the crypto market crashing?
The two most important contribution to the ongoing bull market is the meteoric rise in Bitcoin due to the ETF approval and the sudden interest spike in Solana ecosystem. But the recent move suggests that the upward momentum is dissipating and a correction looms.
Lots of tension ahead of this week's Fed decision
Last week, we got a strong round of US economic data accompanied by hotter US inflation reads. The takeaway of course is that there might be a lot more pressure on the Fed to be looking to scale back its rate cut outlook at this week’s meeting.