NZD/USD subdued around 0.6150 after US PMIs and Fed minutes

During the week, the New Zealand dollar is down 0.82%.
The market sentiment is mixed as US equities rally alongside safe-haven currencies.
The Fed to hike 75 bps in the July meeting, as shown by June’s FOMC minutes.

Christian Borjon Valencia FXStreet

The New Zealand dollar drops for the second straight day but trades within the boundaries of Tuesday’s price action, just above the weekly low at around 0.6150s, following the release of the US Federal Reserve June meeting minutes. At 0.6152, the NZD/USD portrays a risk-off mood in the FX space, though US equities are rising.

NZD/USD drops due to risk-off mood and a strong US dollar

The kiwi has been under downward pressure as well as most G8 currencies. A buoyant greenback courtesy of worldwide recession fears, another China coronavirus outbreak, and elevated inflation spurred safe-haven flows since Tuesday. The US Dollar Index, a gauge of the greenback’s performance vs. six currencies, rose above the 107.000 mark for the first time since December 2002, reaching a 20-year high at 107.264.

Concerning the awaited US Federal Reserve’s minutes, FOMC pledged to its hawkish posture, and policymakers agreed that a 75 bps rate hike is warranted. Fed officials noted that even a “more restrictive stance” could be appropriate if inflation prevails while acknowledging that economic growth risks are skewed to the downside.

In the meantime, the US 2s-10s yield curve has remained inverted since Tuesday late in the North American session. Analysts at ING commented, “Inverted yield curves are typically bad news for pro-growth currencies (commodity exporters + Europe & Asia ex-Japan) and typically good news for the dollar and the Japanese yen and Swiss franc. This environment looks set to continue over the summer months as the Fed continues to push ahead with tightening.”

Elsewhere, an absent New Zealand economic docket left NZD/USD traders adrift to US economic data and market sentiment.

Earlier during the New York session, the US docket featured S&P Global and US ISM Services and Composite PMIs, with figures beating expectations but trailing previous readings. That illustrates a gloomy scenario as the US economic growth slows down.

The week ahead, the US economic docket will feature ADP Employment Change, Initial Jobless Claims, and Fed speakers on Thursday.

NZD/USD Key Technical Levels

NZD/USD

Overview
Today last price	0.6152
Today Daily Change	-0.0018
Today Daily Change %	-0.29
Today daily open	0.6175

Trends
Daily SMA20	0.629
Daily SMA50	0.6376
Daily SMA100	0.6598
Daily SMA200	0.6736

Levels
Previous Daily High	0.6227
Previous Daily Low	0.6124
Previous Weekly High	0.6327
Previous Weekly Low	0.6148
Previous Monthly High	0.6576
Previous Monthly Low	0.6197
Daily Fibonacci 38.2%	0.6163
Daily Fibonacci 61.8%	0.6188
Daily Pivot Point S1	0.6123
Daily Pivot Point S2	0.6072
Daily Pivot Point S3	0.602
Daily Pivot Point R1	0.6226
Daily Pivot Point R2	0.6278
Daily Pivot Point R3	0.6329

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

USD/JPY eyes August swing low, near 155.20 ahead of US NFP

USD/JPY retests the August monthly swing low during the Asian session on Friday as a more hawkish repricing of BoJ rate-hike bets and a suspected intervention continue to underpin the Japanese Yen. Meanwhile, the US Dollar is seen consolidating the previous day's heavy losses amid soft US bond yields, further weighing on the currency pair as traders keenly await the US NFP report.

AUD/USD consolidates above 0.7200; US NFP awaited

AUD/USD holds steady above 0.7200, near its highest level since mid-May, as bulls await the US NFP report for more cues on the Fed's policy path before placing fresh bets. Meanwhile, the recent decline in US bond yields keeps the US Dollar depressed near its lowest level in over a week and acts as a tailwind for the Aussie amid the RBA's hawkish tilt.

Gold tumbles as blockbuster US NFP lift US Dollar, Treasury yields

Gold (XAU/USD) falls sharply on Friday, snapping a two-day recovery after the US Nonfarm Payrolls (NFP) report surprised strongly to the upside. The metal briefly climbed above $4,500 on Thursday, gaining nearly 2%, but has since erased a large part of that advance.

Crypto’s $638 million buyback boom may not be as bullish as it looks

Decentralized Finance (DeFi) protocols reportedly spent $638 million to buy back their native tokens in August, up 17% from a year earlier. On the surface, the buyback trend suggests the cryptocurrency industry is maturing fast, adopting one of Wall Street’s oldest tools to bolster valuations and distribute revenue. The headline becomes less impressive once the number is opened up.

Why hawkish Bank of Japan expectations aren't enough to sustain the Japanese Yen rally

The Japanese Yen (JPY) experienced a sudden burst higher after falling back below the 160.00 psychological mark against the US Dollar (USD) earlier this week amid a more hawkish repricing of Bank of Japan (BoJ) rate hike expectations.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.