NZD/USD sinking to lower end of 52-week range
- NZD/USD bears looking to the RBNZ to cut rates, perhaps as soon as Sep.
- NZD/USD traders looking to the investment fears of a global recession.
NZD/USD has been stablising in the longterm downtrend, down 0.37% on the day though, having travelled from a high of 0.6398 to a low of 0.6357 within a fifty-two-week range of 0.6969 to recent lows of 0.6342.
NZD/USD fallen steeply since July with the Reserve Bank of New Zealand, (RBNZ), slashed rates and the market started to offload the bird in anticipation of further rate cuts to come.
The bird, of late, found some solace on the fact that the Federal Reserve is likely being forced into a corner where rates will need to come down, but the impetus is where the risk is for the bird.
A global recession, or at least a slow down which is being feard by investors, the Dollar tends to find a bid and with the N.Y. Fed probability of recession index way into the 30s, indicating 100% chance of a recession, the commodities are likely to be coming under further pressure which in turn weighs on the antipodeans.
RBNZ September meeting is live
"We expect a follow-up 25bp cut in November, but with the global data-flow deteriorating, September remains live. It’s our expectation that slowing economic momentum is finding a floor around about now, but so far the evidence of a rebound is tentative at best. Indeed, risks appear skewed towards the slowdown lasting a little longer than we expect,"
analysts at ANZ Bank, and should such a view come into fruition, then the bird can be expected to remain in supply.
NZD/USD levels
Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
