New Zealand Dollar weakens below 0.5750 as PBOC rates hold, US-Iran talks weigh
The NZD/USD pair trades in negative territory around 0.5735 during the early Asian session on Monday. The China-proxy New Zealand Dollar (NZD) remains weak following the People’s Bank of China (PBOC) interest rate decision. Traders continue to digest the developments surrounding the US-Iran peace deal.
The PBOC announced to leave its Loan Prime Rates (LPRs) unchanged on Monday. The one-year and five-year LPRs were at 3.00% and 3.50%, respectively.
Traders will closely monitor the Middle East developments surrounding the US-Iran agreement. Progress on the US-Iran peace deal could support the riskier assets such as the shared currency. On the other hand, signs of a prolonged US-Iran conflict could boost the Greenback as a safe-haven currency.
Last week, the US Federal Reserve (Fed) decided to leave its benchmark interest rate unchanged between 3.50% and 3.75% after Kevin Warsh's first meeting in charge of the central bank. Warsh said during the press conference that “price stability” would be the Fed’s guiding principle.
Futures traders have priced in that the Fed is likely to hike rates by 25 basis points (bps) at its September meeting, with some chance seen of a move as soon as next month’s meeting.
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.
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