NZD/USD: Trimming losses on New Zealand Treasury's comments that QE is less appealing

NZD/USD jumps 20 pips on comments by New Zealand's Treasury that QE is less appealing.
Treasury feels RBNZ could cut rates to the negative territory if required.

Omkar Godbole FXStreet Contributor

NZD/USD is recovering lost ground on comments by New Zealand's Treasury that asset purchases or quantitative easing (QE) are a less appealing tool of monetary easing.

The currency pair is currently trading at 0.6460, having hit a low of 0.6438 ten minutes before press time.

The Reserve Bank of New Zealand (RBNZ) delivered a better-than-expected 50 basis point rate cut earlier this month and left the doors open for further easing, triggering speculation that the central bank could hit the zero lower bound in the near future and start unconventional measures like the QE.

New Zealand's Treasury, however, was out on the wires about 15 minutes ago stating that it is not very keen on potential RBNZ QE.

That like put a bid under the NZD, helping the pair rise more than 20 pips to 0.6460. The pair, however, is still down 0.10% on the day.

While New Zealand's treasury said that QE is less appealing, it added that the central bank may cut rates to -0.35%, if required. As a result, the bounce seen in the last few minutes could be short-lived.

Pivot levels

1. R3 0.6533
2. R2 0.6517
3. R1 0.6493
PP 0.6477
1. S1 0.6453
2. S2 0.6437
3. S3 0.6413

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD remains heavy near 1.1600 after hot EU inflation data

EUR/USD remains heavily offered near 1.1600, six-week lows, in the European session on Tuesday. The pair fails to find any inspiration from a surprise pick up in Eurozone inflation for February, as the US Dollar continues to attract safe haven flows amid escalating geopolitical tensions in the Middle East.

GBP/USD attacks 1.3300, refreshing three-month lows

GBP/USD is deep in the red near 1.3300, accelerating its downside to renew three-month lows in European trading on Tuesday. The ongoing escalation in the Iran war, combined with rising Oil prices, weighs negatively on the higher-yielding Pound Sterling as the US Dollar capitalizes on increased haven demand.

Gold falls below $5,300 as stronger USD counter Middle East woes

Gold attracts some intraday selling and falls below $5,300 on Tuesday. The US Dollar climbs to a fresh high since January 20 and turns out to be a key factor exerting downward pressure on the commodity. However, concerns about a broader regional conflict in the Middle East continue to weigh on investors' sentiment and underpin demand for the traditional safe-haven bullion.

Stellar risks deeper losses as derivatives metrics turn negative

Stellar is trading red below $0.16 at the time of writing on Tuesday, after a slight recovery the previous day. Weakening derivatives data caps the recovery, while an unfavorable technical outlook projects a deeper correction for the XLM token in the upcoming days.

Middle East conflict ramps up a gear as energy price spike rips through markets

It’s another risk off day as geopolitical headwinds continue to batter financial markets. Although markets calmed during the US session and US stocks managed to post gains on Monday, this has not fed through to the European session, and stocks and bonds are sharply lower for a second day.

Hyperliquid Price Forecast: HYPE rises on commodities demand amid US-Iran war

Hyperliquid (HYPE) steadies above $33 at press time on Tuesday, marking its fourth consecutive day of recovery in a broadly volatile market due to the ongoing US-Israel strikes on Iran.