NZD/USD remains below 0.6100 as weak Chinese inflation data dent sentiment


  • NZD/USD ticks lower on the last day of the week and is pressured by a modest USD strength.
  • Weaker Chinese inflation figures add to economic woes and benefit the safe-haven Greenback.
  • The uncertainty over the Fed’s rate-hike path should cap the USD and lend support to the major.

The NZD/USD pair struggles to capitalize on the previous day's strong move up and edges lower during the Asian session on Friday. Spot prices currently trade just below the 0.6100 mark, though remain just a few pips below the weekly high.

The prevalent cautious mood around the equity markets, which, along with a modest uptick in the US Treasury bond yields, benefits the safe-haven US Dollar (USD) and undermines the risk-sensitive Kiwi. Weaker-than-expected Chinese inflation figures released earlier today add to worries about a global economic slowdown and tempers investors' appetite for riskier assets. In fact, the National Bureau of Statistics reported that China's headline CPI contracted by 0.2% in May and rose by 0.2% over the past 12 months.

Adding to this, China's Producer Price Index (PPI) registered its worst decline since February 2016 and fell 4.6% YoY in May. This comes on the back of the recent dismal macro data from China and points to slowing post-COVID recovery in the world's second-largest economy. The downside for the NZD/USD pair, however, remains cushioned as the USD bulls seem reluctant to place aggressive bets in the wake of firming expectations that the Federal Reserve (Fed) will skip raising interest rates at its June 13-14 meeting.

Against the backdrop of last week's dovish rhetoric from several FOMC members, a rise in the US Initial Jobless Claims to a 20-month high last week lifts bets for an imminent pause in the US central bank's rate-hiking cycle. The markets, however, are still pricing in the possibility of another 25 bps Fed rate hike in July. This could act as a tailwind for the Greenback ahead of next week's release of the latest US consumer inflation figures and the key central bank event risk - the highly-anticipated FOMC monetary policy meeting.

In the meantime, the US bond yields will continue to play a key role in influencing the USD price dynamics and provide some impetus to the NZD/USD pair. Apart from this, the broader risk sentiment might contribute to producing short-term trading opportunities in the absence of any relevant market-moving economic data. Nevertheless, spot prices remain on track to post modest gains for the second straight week.

Technical levels to watch

NZD/USD

Overview
Today last price 0.6091
Today Daily Change -0.0004
Today Daily Change % -0.07
Today daily open 0.6095
 
Trends
Daily SMA20 0.6128
Daily SMA50 0.6191
Daily SMA100 0.6237
Daily SMA200 0.6149
 
Levels
Previous Daily High 0.61
Previous Daily Low 0.6026
Previous Weekly High 0.6112
Previous Weekly Low 0.5985
Previous Monthly High 0.6385
Previous Monthly Low 0.5985
Daily Fibonacci 38.2% 0.6072
Daily Fibonacci 61.8% 0.6055
Daily Pivot Point S1 0.6047
Daily Pivot Point S2 0.6
Daily Pivot Point S3 0.5973
Daily Pivot Point R1 0.6122
Daily Pivot Point R2 0.6148
Daily Pivot Point R3 0.6196

 

 

Share: Feed news

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


Recommended content

Editors’ Picks

AUD/USD defends 0.6400 after Chinese data dump

AUD/USD defends 0.6400 after Chinese data dump

AUD/USD has found fresh buyers near 0.6400, hanging near YTD lows after strong China's Q1 GDP data. However, the further upside appears elusive amid weak Chinese activity data and sustained US Dollar demand. Focus shifts to US data, Fedspeak. 

AUD/USD News

USD/JPY stands tall near multi-decade high near 154.50

USD/JPY stands tall near multi-decade high near 154.50

USD/JPY keeps its range near multi-decade highs of 154.45 in the Asian session on Tuesday. The hawkish Fed expectations overshadow the BoJ's uncertain rate outlook and underpin the US Dollar at the Japanese Yen's expense. The pair stands resilient to the Japanese verbal intervention. 

USD/JPY News

Gold: Buyers take a breather below $2,400 amid easing geopolitical tensions

Gold: Buyers take a breather below $2,400 amid easing geopolitical tensions

Gold price is catching a breath below $2,400 in Asian trading on Tuesday, having risen over 1% in the US last session even on a solid US Retail Sales report, which powered the US Dollar through the roof. Easing Middle East geopolitical tensions and strong Chinese data could cap Gold's upside. 

Gold News

SOL primed for a breakout as it completes a rounding bottom pattern

SOL primed for a breakout as it completes a rounding bottom pattern

Solana price has conformed to the broader market crash, following in the steps of Bitcoin price that remains in the red below the $65,000 threshold. For SOL, however, the sensational altcoin could have a big move in store.

Read more

Israel-Iran military conflict views and takeaways

Israel-Iran military conflict views and takeaways

Iran's retaliatory strike on Israel is an escalation of Middle East tensions, but not necessarily a pre-cursor to broader regional conflict. Events over the past few weeks in the Middle East, more specifically this past weekend, reinforce that the global geopolitical landscape remains tense.

Read more

Forex MAJORS

Cryptocurrencies

Signatures