Kiwi extends losses after failure at 0.5870. US dollar strengthens amid cautious market sentiment. NZD/USD expected to weaken further in coming weeks Credit Suisse. NZD heads south for the second straight day on Friday after failing to break through resistance at 0.5870 earlier today. The pair is plunging 0.5% on the day, though remains on track to beat a two-week recovery from a 2½-year low of 0.5510. KIWI LOSES MARKET ON WEAKNESS OF RISK PROCEDURE The positive price action seen in the first half of the week lost its grip on Thursday as the pair failed to accept above 0.5870 as risk appetite disappeared and the US dollar began to recover lost ground. However, prices at $ , remained subdued amid cautious investors ahead of the Federal Reserve’s monetary policy meeting next week. Markets priced in a 0.75% increase on Wednesday, although the likelihood of a shorter hike in December has increased significantly in recent days, weighing on the US dollar. Based on macroeconomic data, it can be said that several US indicators could not give a clear direction to the US dollar. US personal spending beat expectations, confirming that consumption, one of the main drivers of US GDP, remained resilient despite accelerating inflation. On the other hand, private sector wage growth slowed in the third quarter, suggesting that inflation may be nearing a peak, consistent with the Federal Reserve slowing its interest rate hikes. NZD/USD EXPECTS PRESS DETERMINATION DIRECTION – HSBC Broader HSBC currencies analysts expect the pair to extend losses in the coming weeks: „NZD/USD expected to fall against risk aversion in the coming weeks (…) The positive consumption , migration from New Zealand and thanks to inflation data, the market does not see the risks of a hard fall as strongly as before. However, the market is currently pricing in a further 200 basis point increase in the policy rate by mid-2023, so the economy could be wounded over time.

James Rogers

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