- NZD/USD struggled to gain any meaningful traction and oscillated in a familiar trading range.
- The cautious mood acted as a headwind for the risk-sensitive kiwi amid a modest USD uptick.
- Reduced bets for more aggressive Fed rate hikes might cap the USD and lend some support.
The NZD/USD pair extended its sideways price moves for the second straight day on Tuesday and remained confined in a range around the 0.6300 mark heading into the European session.
Despite hopes that inflation might be nearing its peak, investors remain concerned that rapidly rising interest rates and tighter financial conditions would pose challenges to global economic growth. This was evident from the prevalent cautious mood around the equity markets, which, in turn, acted as a headwind for the risk-sensitive kiwi.
The downside, however, remains cushioned, at least for the time being, amid subdued US dollar demand. The recent decline in commodity prices has eased concerns about the persistent rise in inflationary pressures. Apart from this, recession fears forced investors to trim their bets for more aggressive Fed rate hikes and undermined the USD.
The mixed fundamental backdrop, so far, has failed to assist the NZD/USD pair to gain any meaningful traction. Even from a technical perspective, spot prices have been oscillating in a familiar trading range over the past two weeks or so, which further makes it prudent to wait for a sustained move in either direction before placing fresh bets.
Market participants now look forward to the US economic docket, featuring the release of the Conference Board's Consumer Confidence Index and Richmond Manufacturing Index later during the early North American session. This, along with the US bond yields and the broader risk sentiment, will influence the USD and provide some impetus to the NZD/USD pair.
The focus, however, will remain glued to Fed Chair Jerome Powell's appearance on Thursday. Investors will look for fresh clues about the US central bank's policy tightening path. This will play a key role in driving the near-term USD demand and help determine the next leg of a directional move for the NZD/USD pair.
Technical levels to watch
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
GBP/USD rises to near 1.2540, driven by higher UK GDP
GBP/USD edged higher to near 1.2540 during Asian hours on Friday, buoyed by the release of higher-than-expected UK Gross Domestic Product (GDP) data for the first quarter.
EUR/USD: The crucial resistance level will emerge at the 1.0790–1.0800 region
The EUR/USD pair trades on a softer note near 1.0775 during the early European hours on Friday. The downtick of the major pair is supported by the renewed US Dollar demand amid hawkish comments from Federal Reserve officials.
Gold price attracts some buyers despite hawkish Fedspeak
Gold price edges higher for the second consecutive day on Friday. Weak employment data bolstered the speculation that the weakening economy would force the Fed to cut rates.
XRP tests support at $0.50 as Ripple joins alliance to work on blockchain recovery
XRP trades around $0.5174 early on Friday, wiping out gains from earlier in the week, as Ripple announced it has joined an alliance to support digital asset recovery alongside Hedera and the Algorand Foundation.
Rate cut optimism fuelled by higher US jobless claims
With Federal Reserve policy acting as the primary driver of investor sentiment in 2024, renewed optimism surrounding the possibility of rate cuts has propelled the Dow to its most significant rally since December.