NZD/USD set to refresh three-month high above 0.6250 as RBNZ-Fed policy divergence widens


  • NZD/USD is looking to print a fresh three-month high above 0.6250 amid multiple tailwinds.
  • Widened RBNZ-Fed policy divergence, positive market sentiment, and a weak US Dollar have supported the Kiwi Dollar.
  • A significant improvement in US Durable Goods Orders has failed to support the US Dollar.

The NZD/USD pair is on the edge of refreshing its three-month high above 0.6250 ahead. The presence of multiple tailwinds such as risk-on profile, widened Reserve Bank of New Zealand (RBNZ)-Federal Reserve (Fed) policy divergence, and weak US Dollar Index (DXY) have strengthened the Kiwi Dollar against the Greenback.

The risk profile is extremely upbeat as plenty of Fed policymakers are expecting a slowdown in the rate hike pace ahead. Positive market sentiment empowered the S&P500 to carry forward its upside momentum on Wednesday. Meanwhile, the US dollar index (DXY) slipped firmly to near 106.10 despite a robust increase in demand for Durable Goods.

The US Durable Goods Orders data landed at 1%, significantly higher than the estimates and the prior release of 0.4%. This has indicated that consumer demand is still solid despite accelerating interest rates and higher inflation rates.

The returns on US Treasury bonds have dropped further as the minutes of the Federal Open Market Committee (FOMC) dictated that a slowdown in the rate hike pace would allow Fed chair Jerome Powell to judge progress on their goals. The 10-year US Treasury yields have dropped below 3.70%.

On the New Zealand front, investors are still in a hangover of 75 basis points (bps) rate hike and consideration of the full percent rate in its monetary policy meeting on Wednesday. It seems that the battle against a historic surge in inflation is demanding more blood and sweat from RBNZ Governor Adrian Orr. The RBNZ has pushed its Official Cash Rate (OCR) to 4.25%, which has widened the RBNZ-Fed policy divergence.

NZD/USD

Overview
Today last price 0.624
Today Daily Change 0.0088
Today Daily Change % 1.43
Today daily open 0.6152
 
Trends
Daily SMA20 0.5972
Daily SMA50 0.5827
Daily SMA100 0.6017
Daily SMA200 0.6307
 
Levels
Previous Daily High 0.6163
Previous Daily Low 0.6093
Previous Weekly High 0.6206
Previous Weekly Low 0.6062
Previous Monthly High 0.5874
Previous Monthly Low 0.5512
Daily Fibonacci 38.2% 0.6136
Daily Fibonacci 61.8% 0.612
Daily Pivot Point S1 0.611
Daily Pivot Point S2 0.6067
Daily Pivot Point S3 0.604
Daily Pivot Point R1 0.6179
Daily Pivot Point R2 0.6206
Daily Pivot Point R3 0.6249

 

 

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 clings to recovery gains below 1.0400 ahead of German inflation

EUR/USD clings to recovery gains below 1.0400 ahead of German inflation

EUR/USD is holding onto recovery gains below the 1.0400 mark heading in early Europe. The renewed sell-off in the US Dollar amid the China reopening optimism underpins the Euro. Focus shifts to ECB-speak and Germany's inflation data. 

EUR/USD News

GBP/USD retreats from daily highs, holds above 1.2000

GBP/USD retreats from daily highs, holds above 1.2000

GBP/USD has lost its bullish momentum and retreated toward 1.2000 during the European trading hours on Tuesday. With the upbeat market mood not allowing the US Dollar to gather strength, however, the pair stays in positive territory ahead of US data, Bailey testimony.

GBPUSD News

Gold recovery needs acceptance above $1,760

Gold recovery needs acceptance above $1,760

Gold price picks up bids to reverse the previous day’s losses amid cautious optimism in the financial markets. Easing in China Covid numbers, efforts to defend reality sector join downbeat US Dollar to favor Gold buyers. Hopes of more positives from China signal further upside. 

Gold News

Can XRP price kick-start 30% upswing if China removes zero-Covid restrictions?

Can XRP price kick-start 30% upswing if China removes zero-Covid restrictions?

XRP price shows that it is taking its sweet time to overcome and sustain above a crucial resistance level. It could catalyze a quick run-up.

Read more

Hawkish Fed speak adds to macro headwinds

Hawkish Fed speak adds to macro headwinds

St. Louis Fed President James Bullard said in an online event that the Fed will need to hike rates into next year and that there is still "a ways to go" before a policy is "restrictive."

Read more

Forex MAJORS

Cryptocurrencies

Signatures