New Zealand Dollar slides closer to 0.5800 as Iran risks lift USD and counter hawkish RBNZ
The NZD/USD pair meets with a fresh supply during the Asian session on Friday and erodes a part of the previous day's solid recovery gains from over a two-month low. Spot prices, however, manage to hold above the 0.5800 mark and remain confined within a familiar range held since the beginning of this week.
The global risk sentiment got a strong boost after US President Donald Trump said on Thursday that a deal had been reached with Iran and the final document could be signed soon, perhaps even over the weekend. However, Iran countered that it had not reached a final decision on an agreement, capping the latest optimism. This, along with hawkish US Federal Reserve (Fed) bets, helps revive demand for the safe-haven US Dollar (USD), which, in turn, is seen as a key factor exerting some pressure on the NZD/USD pair.
The US Consumer Price Index (CPI) and Producer Price Index (PPI) released this week pointed to re-accelerating inflation. This reaffirmed market expectations that the US central bank will hike interest rates by the end of this year. The outlook, in turn, is seen as another factor underpinning the Greenback amid persistent geopolitical uncertainties. However, the Reserve Bank of New Zealand's (RBNZ) abrupt hawkish shift could act as a tailwind for the New Zealand Dollar (NZD) and limit losses for the NZD/USD pair.
The RBNZ's forecast strongly projects a 25 basis points (bps) rate increase at the upcoming July 8 meeting and indicated that the OCR could reach roughly 2.85% by the end of this year, implying up to three rate hikes. This makes it prudent to wait for strong follow-through selling before positioning for an extension of the recent pullback from the vicinity of the 0.6000 psychological mark, or the May monthly swing high. Traders now look to the University of Michigan's US Consumer Sentiment Index for a fresh impetus.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
With CoreWeave fueling the AI frenzy, can Nebius (NBIS.US) defend the AI computing power rally with explosive performance?
At Wednesday’s US stock market close, strong earnings reports and financing plans from CoreWeave drove collective gains in the storage chip, AI chip, optical interconnect, and new cloud sectors. CoreWeave and Nebius surged by approximately 24.7% and 15.4%, respectively. However, after the bell, media reports regarding another extramarital affair involving Jensen Huang and discussions by the board about his tenure caused Nvidia to drop more than 8%, putting pressure on the prices of most AI computing power-related stocks.
Morgan Stanley: The expansion value of BHP South Australia copper mine is still underestimated, on-site inspection may become a catalyst for revaluation, “Overweight” rating maintained.
Morgan Stanley released a research report, maintaining an "Overweight" rating on BHP Group Limited (Australian shares) and a target price of 68 AUD.
Deutsche Bank remains bullish on Palo Alto Networks (PANW.US) ahead of earnings: Q1 results expected to be solid, platform advantages will help expand market share.
Deutsche Bank's latest research report predicts that Palo Alto Networks will deliver solid performance in the first quarter, with all key metrics exceeding market expectations, although the margin of outperformance may narrow compared to the previous quarter.
On the eve of Anthropic (ANT.US) IPO: $19 billion in passive buying on the way, will “SpaceX-style” index arbitrage be repeated?
From SpaceX to Anthropic: Giant new listings adopt a new approach.
Crypto prices
More
