NZD/USD seesaws above 0.6200 on RBNZ’s Orr, Fed’s preferred inflation, Powell in focus

  • NZD/USD consolidates recent gains around weekly top, sidelined of late.
  • RBNZ Governor Orr favored multiple rate hikes but appears cautious over economic growth.
  • China’s stimulus, US data and Fedspeak favored buyers previously.
  • US Core PCE Price Index, Fed Chair Jerome Powell’s Jackson Hole Speech are crucial for fresh impulse.

NZD/USD fades the upside momentum as it declines to 0.6215 after the Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr sounds cautious during his speech at the Jackson Hole on early Friday morning in Asia. Also exerting downside pressure on the Kiwi pair are the latest geopolitical headlines, as well as a cautious mood ahead of Fed Chair Jerome Powell’s speech at the aforementioned symposium event.

RBNZ Governor Orr initially mentioned that we think there will be at least another two rate hikes. The policymaker also said, “Our core view is we won't see a technical recession.” However, his comments like, “Central banks may need to push towards zero growth,” seemed to have weighed on the NZD/USD prices.

Also read: RBNZ Orr: At least another couple of rate hikes to come

Additionally favoring the NZD/USD sellers are the geopolitical headlines surrounding China, the US and Iran. The US has suspended 26 Chinese carrier flights in response to China's action, per Reuters. On the other hand, a letter got viral quoting US President Joe Biden as saying, “The US struck Iran-backed forces in Syria in order to safeguard American civilians both at home and abroad.”

It should be noted that China’s heavy stimulus and mildly firmer US data, as well as Fedspeak, favored the NZD/USD buyers previously. China’s nearly one trillion yuan worth of stimulus and a holistic approach by the domestic institutions to safeguard the world’s second-largest economy renewed market optimism earlier.

That said, New Zealand’s ANZ Consumer Confidence for August rose to 85.4 versus 81.9 but failed to impress the pair buyers. As per the US data, the second estimate of the US Gross Domestic Product (GDP) Annualized improved to -0.6% in the second quarter (Q2) versus -0.9% flash estimations and -0.8% market forecasts. Further, US Initial Jobless Claims dropped to the lowest levels in seven weeks, to 243K for the week ended on August 19 versus 253K expected and a revised down prior of 245K.

Moving on, Kansas City Fed President Esther George said on Thursday, "For the near-term thinking about higher interest rates seems reasonable to me." The policymaker also mentioned that (it’s) too soon to say what to expect in September (as) more key data coming. Philadelphia Fed President Patrick Harker was on the same line while he noted, per Reuters, that he wants to see the next inflation reading before deciding on the September rate decision but added that a 50 basis points rate hike would still be a substantial move. Also, Atlanta Fed President Raphael Bostic said to the Wall Street Journal (WSJ) that “at this point, I'd toss a coin between 50 bps and 75 bps,” adding that “if data remains strong and inflation doesn't soften, it may make a case for another 75 bps.

Against this backdrop, Wall Street marked the biggest daily jump in a week while the US 10-year Treasury yields dropped back to 3.03%, after rising to 3.10% the previous day.

Moving on, the US Core Personal Consumption Expenditure (PCE) Price Index, the Fed’s preferred inflation gauge, may entertain the traders. Forecasts suggest that the YoY print is to ease to 4.7% from 4.8% while the monthly figures may drop to 0.3% while 0.6% prior. However, more important will be Fed Chair Powell’s speech at the Jackson Hole.

Also read: Jackson Hole Symposium Preview: Will Powell power dollar bulls?

Technical analysis

NZD/USD pulls back from a 50-DMA level surrounding 0.6235 but the bears remain cautious until witnessing a clear break of the 0.6150 horizontal support.

Additional important levels

Today last price 0.6217
Today Daily Change 0.0030
Today Daily Change % 0.48%
Today daily open 0.6187
Daily SMA20 0.629
Daily SMA50 0.6254
Daily SMA100 0.6387
Daily SMA200 0.659
Previous Daily High 0.6239
Previous Daily Low 0.6163
Previous Weekly High 0.6457
Previous Weekly Low 0.6165
Previous Monthly High 0.633
Previous Monthly Low 0.6061
Daily Fibonacci 38.2% 0.6192
Daily Fibonacci 61.8% 0.621
Daily Pivot Point S1 0.6154
Daily Pivot Point S2 0.6121
Daily Pivot Point S3 0.6078
Daily Pivot Point R1 0.623
Daily Pivot Point R2 0.6272
Daily Pivot Point R3 0.6305



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.

Feed news Join Telegram

Recommended content

Recommended content

Editors’ Picks

EUR/USD struggles to gather momentum, stays near 1.0350

EUR/USD struggles to gather momentum, stays near 1.0350

EUR/USD is having a difficult time gathering bullish momentum and fluctuating at around 1.0350 in the American session. With Wall Street's main indexes pushing lower after the opening bell, the US Dollar is gathering strength and not allowing the pair to gain traction.


GBP/USD falls below 1.2000 as mood sours

GBP/USD falls below 1.2000 as mood sours

GBP/USD has turned south and declined below 1.2000 in the second half of the day on Tuesday. The negative shift witnessed in risk sentiment seems to be helping the US Dollar find demand and forcing the pair to stay on the back foot.


Gold retreats to $1,750 area as US yields edge higher

Gold retreats to $1,750 area as US yields edge higher

Gold price lost its traction during the American trading hours and retreated to the $1,750 area. The benchmark 10-year US Treasury bond yield is up 1% on the day slightly above 3.7%, not allowing XAU/USD to build on earlier gains.

Gold News

Bitcoin price hears jingle bells rolling in

Bitcoin price hears jingle bells rolling in

Bitcoin price looks set to rally substantially higher now that the social unrest in China is calming down. BTC could stage a 17% rally in the coming week.

Read more

Alibaba shares advance 5% on reduced China covid restrictions

Alibaba shares advance 5% on reduced China covid restrictions

BABA stock has jumped more than 5.2% in Tuesday’s premarket to $80 after China's National Health Commission said covid-related lockdowns should end as soon as possible. 

Read more