NZD/USD struggles to shift auction above 0.6260 as USD Index attempts recovery

NZD/USD is facing hurdles in shifting its auction above 0.6260.
The USD Index has shown a recovery move, however, the downside bias seems healthy amid the risk-on mood.
A 25bp rate hike is expected from the RBNZ, which will push the OCR to 5%.

Sagar Dua FXStreet

The NZD/USD pair is struggling in shifting its auction above 0.6260 in the Asian session. The Kiwi asset is facing hurdles as the US Dollar Index (DXY) has shown a recovery move near 102.40. The USD Index has found an intermediate cushion around 102.40, however, the downside bias has not faded yet as investors are split about the interest rate decision to be taken by the Federal Reserve (Fed) in May.

S&P500 futures have generated significant gains in the Asian session after a choppy Tuesday on hopes that fears United States banking crisis would recede further. The overall market sentiment looks positive amid improved risk appetite for risk-sensitive assets. The demand for US government bonds is getting dented further amid decelerating US banking jitters. This has increased 10-year US Treasury yields to 3.58%.

Going forward, the release of the core Personal Consumption Expenditure (PCE) Price Index (Feb) data will be of significant importance. As per the consensus, monthly core PCE would accelerate by 0.4%, lower than the former expansion of 0.6%. The annual figure is expected to remain steady at 4.7%. A deceleration in the pace of consumer spending on core goods will further ease the chances of one more rate hike by the Fed.

As per the CME Fedwatch tool, less than 50% odds are in favor of a one more 25 basis point (bp) rate hike by the Fed for its May meeting.

On the New Zealand Dollar front, investors are expecting a less-hawkish monetary policy stance by the Reserve Bank of New Zealand (RBNZ) next week due to the dismal economic outlook. Analysts at ANZ Bank expect the RBNZ will raise the Official Cash Rate (OCR) by 25bp to 5.00% at its Monetary Policy Review (MPR) next Wednesday. A deceleration in the pace of rate hikes is optimal for decelerating economy. The report from ANZ Bank also dictated that the OCR would peak at 5.25% with one more hike to come in May.

NZD/USD

Overview
Today last price	0.6253
Today Daily Change	0.0001
Today Daily Change %	0.02
Today daily open	0.6252

Trends
Daily SMA20	0.6201
Daily SMA50	0.629
Daily SMA100	0.6287
Daily SMA200	0.616

Levels
Previous Daily High	0.6256
Previous Daily Low	0.6195
Previous Weekly High	0.6295
Previous Weekly Low	0.6167
Previous Monthly High	0.6538
Previous Monthly Low	0.6131
Daily Fibonacci 38.2%	0.6233
Daily Fibonacci 61.8%	0.6218
Daily Pivot Point S1	0.6213
Daily Pivot Point S2	0.6173
Daily Pivot Point S3	0.6152
Daily Pivot Point R1	0.6274
Daily Pivot Point R2	0.6295
Daily Pivot Point R3	0.6335

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

AUD/USD gains traction near 0.7100 as the post-Fed USD rally pauses

AUD/USD finds fresh buyers and retakes 0.7100 in the Asian session on Thursday as the US Dollar pauses its hawkish Fed-inspired rally to its highest level since late July. However, RBA rate-hike bets and hopes for US-Iran diplomatic efforts lift risk sentiment and support the risk-sensitive Australian Dollar and the major.

USD/JPY reverses a dip below 156.00 as focus shifts to BoJ

USD/JPY is reversing a brief dip below 156.00 in the Asian session on Thursday, looking to snap a three-day winning streak to a nearly two-week top set the previous day. The US Dollar pauses following the post-Fed rally to seven-week highs, while a more hawkish repricing of the BoJ's policy normalization path supports the Japanese Yen. This keeps the pair's upside limited, with the focus now shifting to the BoJ policy decision due on Friday.

Gold bounces but not out of the woods yet

Gold is facing fresh sellers above $4,300 early Thursday, stalling its recovery from six-week lows of $4,235 reached soon after hawkish US Federal Reserve monetary policy announcements.

XRP and XLM rebound amid mixed signals

Ripple (XRP) and Stellar (XLM) extend their recovery at the time of writing on Thursday after finding support at key technical levels. However, mixed derivatives and on-chain data for both altcoins suggest that traders remain cautious and have yet to show strong conviction in a sustained rebound. Derivatives data shows a mixed and cautious outlook among traders.

The Fed rate hike: What happens now?

The dust has settled on tonight’s Fed meeting and the market reaction is clear: the Fed’s signal that there could be a series of rate hikes has spooked financial markets. Bonds sold off at the short end of the Treasury curve and US stocks also fell, led by the Dow Jones Industrial Average, which slipped more than 1% on Wednesday night.

How Japan became the World's Banker and why that era may be ending

Japan's ultra-low interest rates helped finance trillions of dollars in global investments for more than a decade, making the Japanese Yen one of the world’s cheapest sources of funding. With the Bank of Japan expected to tighten policy again this week, that advantage may be entering a new phase. While most major economies raised interest rates, Japan remained the world's outlier.