nzd to usd

This week has gone from bad to worse for the New Zealand dollar, as NZD/USD has taken a tumble on Thursday. In the North American session, NZD/USD is trading at 0.6248, down 0.74% on the day. The currency has dropped 2.66% this week and is trading at lows not seen since June 2020. US inflation stays hot The US inflation report for April showed that CPI eased, but the decline was much smaller than expected. US CPI dropped from 8.5% to 8.3%, above the estimate of 8.1%. This chilled any speculation of an ‘”inflation peak”, as the markets digested the fact that even if inflation is moving lower, it could do so at a very slow pace. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM Fed member James Bullard said on Wednesday that 50-bps moves were his base case and this appears to be the majority view For the Fed, the high inflation reading confirms that its hawkish stance is justified, but now there are calls for policy makers to be even more aggressive in tightening the monetary screws. The Fed has signalled that it plans to deliver 50-bps increases in June and July, but the markets aren’t dismissing the possibility of a massive 75-bps hike. Fed member James Bullard said on Wednesday that 50-bps moves were his base case and this appears to be the majority view. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM Fed member Mester said on Tuesday that she supports raising rates by 50-bps Still, inflation was higher than investors or the Fed had expected, and the May inflation report, which will be released just a few days prior to the Fed’s next meeting on June 14-15th, will be critical in determining the size of the next rate hike. The Fed has embarked on a rate-hike cycle primarily because of soaring inflation, so it stands to reason that inflation will be a key factor in rate policy. Fed member Mester said on Tuesday that she supports raising rates by 50-bps at the next two meetings and then speeding up or slowing down the pace of increases based on inflation levels. Read next: (BTC) Bitcoin’s Price Tanks Along With Equities. U.S. Stock Market Awaits CPI Report, Poor Performance From The FTSE 100.  At the April meeting, the RBNZ said it would act to ensure that “current high consumer price inflation does not become embedded into longer-term inflation expectations.” The RBNZ is also under pressure to tighten more aggressively after Inflation Expectations for Q2 crept upwards to 3.29% (3.27% prior). Inflation Expectations have now risen for an eighth successive month, and the RBNZ is looking to reverse this trend. At the April meeting, the RBNZ said it would act to ensure that “current high consumer price inflation does not become embedded into longer-term inflation expectations.”  With Inflation Expectations not showing any signs of easing, the RBNZ is widely expected to raise rates by 50-bps at the May 25th meeting. NZD/USD Technical NZD/USD is down sharply and has broken below support at 0.6281. Below, there is support at 0.6169 There is resistance at 0.6344 and 0.6456 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Relevance up to 08:00 2022-08-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. NZD/USD: The chart shows the movement of NZD/USD in the four-hour (H4) chart. Comparing the recent movement to that of the previous ones, it is clear that there was a correction towards the key support level of 0.6262. The trend will remain bullish and the quote will continue to go towards 0.6435 as long as 0.6245 remains a support level. Its breakdown will change the current trend. Good luck! Read more: https://www.instaforex.eu/forex_analysis/319257

Relevance up to 12:00 2022-08-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. NZD/USD Minor Growth The NZD/USD pair increased in the short term and now has almost reached the downtrend line which represents an upside obstacle. After its strong drop, a minor rebound was natural. It could come back to test and retest the downtrend line before resuming its drop. It was traded at 0.6289 at the time of writing, far above today's low of 0.6248. Technically, today's low represents a downside obstacle. NZD/USD Trading Conclusion Staying below the downtrend line and dropping under the low of 0.6248 may announce more declines. This scenario could bring new selling opportunities.     Read more: https://www.instaforex.eu/forex_analysis/289069

Every asset class has been on a rollercoaster ride as investors are watching central bankers all around globe tighten monetary policy to fight inflation.  Financial conditions are starting to tighten and the risks of slower growth are accelerating.   New Zealand NZ Retail Card Spending has downside risks and the Food Price Index, upside risks this week. The cost of living has become the central issue in New Zealand at the moment and a high FPI will heap pressure on the RBNZ to accelerate rate hikes as the economy starts to show signs of stress elsewhere. NZD/USD has traded very heavy in past two weeks as investors price in a hard landing and an RBNZ behind the curve, and as risk sentiment sours internationally. NZD/USD is closing at the weeks lows and could test 0.6200 this week.   Japan Japan releases a raft of second tier data this week. THe 10 and 30-year JGB auctions will be closely watched, if only for signs of poor cover ratio given the BOJ JGB intervention and weakening Yen. THe centre of attention will remain the USD/JPY as the US/Japan rate differential widens. USD/JPY could well test 135.00 in the week ahead if the negative sentiment sweeping markets on Friday spills into next week. Higher oil prices will also weigh onthe Yen. We expect the noise to increase from Tokyo but little chance of USD/JPY intervention at these levels.   Singapore No significant data. The currency remains under pressure as a proxy for China and also because the MAS meets six monthly to determine monetary policy. The next meeting will not be until October to determine if monetary policy gets tightened once again. 

The New Zealand dollar continues to show volatility this week. In the North American session, NZD/USD is trading at 0.6182, down 0.48%, erasing all of Tuesday’s gains. New Zealand retail sales expected to rebound Later today, New Zealand releases retail sales for the second quarter. The markets are expecting a strong rebound of 1.7%, after the Q1 reading of -0.5%. The release is expected to reflect pent-up consumer demand after Covid restrictions were lifted in April. A stronger-than-expected release could give the New Zealand dollar a lift. The RBNZ will be carefully monitoring the retail sales release, as a strong reading would indicate that the economy remains strong and can continue to absorb higher interest rates. The RBNZ has been aggressive, raising rates by 50 basis points at four straight meetings. The central bank is expected to add another 50bp hike at the October meeting, which would bring the cash rate to 3.50%. Inflation has hit 7.3%, but the RBNZ is confident that it will peak soon and expects inflation to fall to 3.8% by the end of 2023. The central bank is cautiously positive about the economic outlook, predicting that the economic slowdown will not turn into a full-blown recession. Over in the US, durable goods orders for July were a mix. The headlines reading slipped to 0.0%, down sharply from 2.2% in June and missing the estimate of 0.6%. Core durable goods was unchanged at 0.3%. The weak data did not weigh on the US dollar, unlike the case after a weak US New Home Sales release on Tuesday, which sent the US dollar broadly lower. Investors are now shifting attention to Thursday’s US Preliminary GDP for Q2. In July, the initial GDP estimate came in at -0.9%, settting off a storm of debate as to whether the US economy was in a recession after back-to-back quarters of negative growth. The debate had political overtones as well, with the White House, trying to avoid being tainted with the “R” word, went to great pains to point out that there are other definitions of a recession. The second GDP estimate is likely to come in at -0.8% or -0.9%; any other number would be a surprise and would likely result in some volatility for the US dollar. NZD/USD Technical NZD/USD faces resistance at 0.6227 and 0.6366 There is support at 0.6126 and 0.6075 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZ dollar slides below 62, retail sales next - MarketPulseMarketPulse

NZD/USD has stabilized today after ending the week with sharp losses. In the North American session, NZD/USD is trading at 0.6149, up 0.22% on the day. Earlier in the day, NZD/USD touched a low of 0.6102, its lowest level since July 14th. Powell’s speech hammers the New Zealand dollar The US dollar ended the week with sharp gains against the major currencies, with the exception of the euro. The New Zealand dollar took it on the chin, as NZD/USD fell 1.43% on Friday. The catalyst for the US dollar’s upward swing was a hawkish speech from Fed Chair Powell at the Jackson Hole Symposium. Powell’s message didn’t contain anything we haven’t heard in recent weeks from the Fed, but this time around, investors internalized Powell’s no-nonsense message that the Fed plans to stay aggressive until the fight against inflation is won. Powell stressed that the Fed would be vigilant not to ease policy prematurely, and added that the Fed would not change policy based on one or two reports of lower inflation. This statement could well have been a warning to the markets not to expect a U-turn in policy if inflation drops, as was the case following the July inflation report. Fed's Governor speech Powell’s speech was unusually brief, which may have been an attempt to prevent investors from looking for some dovish remarks in the speech and ignoring Powell’s message. The concise speech left no room for ambiguity – the Fed will continue to raise rates until it’s convinced that inflation has peaked and is on the decline. Powell’s choice of language was telling – he said that the current policy would cause “some pain”, a phrase which the markets undoubtedly did not want to hear. Powell also avoided language that the markets might have construed as being dovish, such as a “soft recovery”. The head of the Reserve Bank of New Zealand, Adrian Orr, was also in attendance at Jackson Hole. Orr noted that the RBNZ’s policy of higher rates had slowed the economy and warned that economic growth could be “anemic”. Orr said at least two more rate hikes were likely, at which stage the RBNZ hoped to determine rate policy based on economic data. NZD/USD Technical 0.6174 is a weak resistance line. 0.6277 is the next line of resistance There is support at 0.6057 and 0.5979 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZ dollar falls to 6-week low - MarketPulseMarketPulse

AUDNZD is overall bullish however, it is approaching a strong resistance and upper blue trendline so we will be looking for sell setups on lower timeframes.   on H1: AUDNZD is forming a channel in red but the lower trendline is not valid yet, so we are waiting for a new swing low to form around it to consider it our trigger swing. (projection in purple) Trigger => Waiting for that swing low to form and then sell after a momentum candle close below it (gray zone) Meanwhile, until the sell is activated, AUDNZD can still trade higher. Always follow your trading plan regarding entry, risk management, and trade management.  

NZD/USD remains under pressure and is trading below the symbolic 0.60 level. Earlier today, the pair fell to 0.5976, its lowest level since May 2020. New Zealand dollar slides after US inflation data It was Black Tuesday for the New Zealand dollar, as NZD/USD declined by 2.24%. The US dollar recorded strong gains across the board, with the risk-sensitive Australian and New Zealand dollars taking a beating. The catalyst for the US dollar’s sharp upswing was the August inflation report. Although headline inflation fell for a second straight month, investors were far from impressed, sending the equity markets tumbling and the US dollar sharply higher. Headline inflation dropped from 8.5% to 8.3%, but missed the consensus of 8.1%. Core CPI rose to 6.3%, up from 5.9% and above the forecast of 6.1%. The markets had priced in a 75bp increase in September followed by 50bp in November and 25bp in December. However, with inflation higher than expected, the Fed may not be in a position to scale back and market pricing for the September meeting is fluctuating – currently, there is a 64% chance of a 75bp move and a 34% likelihood of a 100bp increase. Larry Summers, a former Treasury Secretary, said on Tuesday that the inflation report indicated that the US has a “serious inflation problem” and a 100bp move would “reinforce credibility”. Read next: Markets Look Like Battlefields After The US Inflation Print. S&P 500, Dow Jones And Nasdaq All Plunged. Forex: Will BoJ Intervene?| FXMAG.COM New Zealand will release GDP for the second quarter on Thursday. The economy is expected to rebound with a strong 1.0% gain, after a decline of 0.3% in Q1. The economy is performing well, with a strong rebound after the Covid pandemic. The country’s credit rating was reaffirmed by S&P today at AA+, an important thumbs up for the New Zealand economy. NZD/USD Technical 0.6017 is a weak resistance line, followed by 0.6085 There is support at 0.5929 and 0.5861 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZ dollar falls to 26-month low - MarketPulseMarketPulse

GBPUSD finds support The pound bounces back as Britain’s core CPI stayed stubbornly high in August. The sharp decline came to a halt at the base of a previous bullish breakout at 1.1480. The RSI’s oversold condition attracted some bargain hunters in the demand zone. The support-turned-resistance at 1.1620 is the next hurdle where trapped buyers would be looking to exit. However, its breach would send Sterling back to 1.1730 on the 20-day moving average, suggesting that the bulls may not yet have had their last word. NZDUSD breaks key support The New Zealand dollar recovers over upbeat Q2 GDP. The pair came under pressure near a former support (0.6160) over the 20-day moving average. The long bearish candle is a sign of capitulation as the short-term mood tanks. A break below the psychological support of 0.6000 has invalidated the recent rebound and indicated that the path of least resistance is down. May 2020’s lows around 0.5920 could be the next target. An oversold RSI may cause a bounce to 0.6050 where trend followers could sell into strength. USOIL hits resistance WTI crude rallied after a slower increase in US inventories. From the daily chart’s perspective, sentiment remains downbeat after the price broke below the key support at 86.00. The bears may see bounces as opportunities to sell at a better price. The current recovery has met stiff selling pressure at 90.00 which coincides with the 30-day moving average. However, if the buy side manages to push past this supply zone, 94.00 could be next. 84.20 is the closest support and its breach could resume the downtrend below 81.30.

New Zealand GDP surprises on the upside New Zealand posted a stronger-than-expected GDP report for Q2. The economy climbed 1.7%, reversing the 0.2% decline in the first quarter. The upswing in growth was driven by the government’s easing of Covid restrictions. The GDP gain removed any fears of a technical recession, which is defined as two consecutive quarters of negative growth. The New Zealand dollar is almost unchanged on the day, trading at the 0.6000 line. Now that New Zealand’s economy is flexing its muscles, what does that mean for the Reserve Bank of New Zealand? The central bank was almost spot on with its GDP forecast at the August meeting, predicting a gain of 1.8%. At the meeting, the Bank projected that the cash rate would peak at 4.1% in mid-2023. Today’s GDP report is not expected to change that stance, with the Bank likely to raise rates by 50bp in the October and November meetings, which would bring the cash rate to an even 4.0%. The Reserve Bank has its hands full with hot inflation, but is relief on the way? The Bank’s steep rate-tightening cycle is expected to slow inflation, which is running at 7.3%. In August, the Bank projected that inflation would fall to 6.4%. Higher interest rates will, sooner or later, bring down inflation, but of course, that is not the whole story. As borrowing and mortgage rates rise, domestic demand will fall, and this trend cannot be halted at the switch of a button. In other words, the effects of a tighter policy will be felt long after the Reserve Bank ends its rate hikes – perhaps the central bank’s biggest challenge is to guide the economy to a soft landing as it grapples with high inflation. . NZD/USD Technical NZD/USD is testing resistance at 0.6017. Next, there is resistance at 0.6085 There is support at 0.5929 and 0.5861 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZD steady after solid GDP - MarketPulseMarketPulse

The New Zealand dollar remains under pressure, as NZD/USD is having a dreadful week, down 2.47%. In the North American session, NZD/USD is trading at 0.5950, down 0.27%. NZ Manufacturing PMI surprises to the upside It has been a solid week for New Zealand data, but that hasn’t helped the New Zealand dollar, which has fallen to its lowest level since May 2020. Earlier today, New Zealand’s manufacturing PMI for August improved to 54.9, up from 53.5 in July and above the consensus of 52.5. This marked the highest level since July 2021 and manufacturing has now expanded for a fifth month running, with readings above the neutral 50.0 level. This is in contrast to global manufacturing, which has been struggling and slowed to 50.3 in August, down from 51.1 in July. Read next: British Pound (GBP) Has Decreased By 15 Percent So Far!| FXMAG.COM Earlier in the week, New Zealand posted a stronger-than-expected GDP report for Q2. The economy climbed 1.7%, reversing the 0.2% decline in the first quarter. The upswing in growth was driven by the government’s easing of Covid restrictions. The gain in GDP removed any fear of a technical recession, which is defined as two consecutive quarters of negative growth. Now that New Zealand’s economy is flexing its muscles, what does that mean for the Reserve Bank of New Zealand? The central bank was almost spot on with its GDP forecast at the August meeting, predicting a gain of 1.8%. At the meeting, the Bank projected that the cash rate would peak at 4.1% in mid-2023. The GDP release is not expected to change that stance, with the Bank likely to raise rates by 50bp in the October and November meetings, which would bring the cash rate to an even 4.0%. Global Recession? With central banks raising interest rates in order to combat inflation, the World Bank has warned that the global economy may tip into a recession. The World Bank report noted that the three largest economies, the US, China and the eurozone were all slowing sharply, and even a “moderate hit to the global economy” could result in a global recession. NZD/USD Technical NZD/USD is testing resistance at 0.6017. Next, there is resistance at 0.6085 There is support at 0.5929 and 0.5861 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. New Zealand dollar extends losses - MarketPulseMarketPulse

NZD/USD: The chart shows the movement of #NZD/USD in the daily (D1) chart. According to technical analysis, there is a key support level, at which the two-year downward trend can be reversed. The pair has been moving towards this direction for some time, particularly in the range of 0.5435. Breaking through it will certainly jump-start the formation of a new medium-term trend, but that is unlikely to happen at least until November 4. Also, its development will depend on the resistance levels 0.5680 and 0.5960. But if the quote goes lower than 0.5435, the trend will remain bearish and there will be no strong upward movement. Good luck!   Relevance up to 11:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323020

NZD/USD is a tad higher. Economists at ANZ Bank expect the pair to remain at the mercy of external forces until the Reserve Bank of New Zealand (RBNZ) meeting next week. Nothing local is really driving the kiwi at the moment “Nothing local is really driving the kiwi at the moment, and instead it’s drifting like a cork in the tide. That’s unlikely to change today either, but next week’s RBNZ MPR may provide a degree of support, especially if the RBNZ remain hawkish, which is appropriate given the inflation backdrop. But until then, the NZD is at the mercy of global forces.” “The pull-back in the USD DXY looks a bit odd against geopolitical developments in Ukraine, given the strength of US jobless claims (pointing to bumper payrolls next week), hawkish Fedspeak, and the very real cracks in the UK that can’t be papered over.” “Support 0.4895/0.5470/0.5565 Resistance 0.6160/0.6400.”

NZD/USD is eyeing to test the weekly highs at 0.5750 as the RBNZ is expected to sound hawkish. A fifth consecutive 50 bps rate hike is expected by the RBNZ to continue the fight against inflation. The DXY is declining towards 111.00 amid lower projections for the US NFP data. The NZD/USD pair has bounced back sharply after dropping to near 0.5682 in the Tokyo session. The asset is broadly oscillating in a 0.5680-0.5726 range and is expected to deliver an upside break of the same. A north-side explosion will drive the asset towards weekly highs at around 0.5750. Weaker performance from the US dollar index (DXY) and soaring hawkish Reserve Bank of New Zealand (RBNZ) bets are strengthening the kiwi bulls. Wednesday’s monetary policy decision by the RBNZ is going to provide a decisive move to the antipodean. RBNZ Governor Adrian Orr is expected to announce a 50 bps rate hike consecutively for the fifth time. The inflationary pressures in the kiwi region have not cooled down yet, therefore, scaling down the ‘hawkish’ tone won’t be a fruitful option.  An announcement of the fifth 50 bps rate hike will push the Official Cash Rate (OCR) to 3.5%. Meanwhile, the DXY has printed a fresh weekly low at 111.44 in the early European session. The DXY is eyeing more weakness towards 111.00. Investors are dumping the DXY ahead of the US Nonfarm Payrolls (NFP) data. As expected, the US economy created 250k jobs in September, lower than the August reading of 315k. The US economy has been maintaining full employment levels, therefore, space for generating more employment is extremely less. Adding to that, the escalating Federal Reserve (Fed)’s interest rates are also restricting the corporate to continue their hiring programs with sheer pace.

The New Zealand dollar continues to rally. In the European session, NZD/USD is trading at 0.5746, up 0.43%. RBNZ likely to deliver 0.50% hike The Reserve Bank of New Zealand holds a meeting on Wednesday. The RBNZ has been aggressive with its rate tightening and is expected to raise rates by 0.50%, which would bring the cash rate to 3.50%, the highest since 2015. Governor Orr has hinted that the rate cycle could be coming to a close soon, but that is still more work to do to tame inflation. In Q2, CPI rose to 7.3%, up from 6.9% in Q1. The economy has performed well, with GDP rising 1.7% in Q2, along with a strong labour market and solid wage growth. This means that Orr can continue to raise rates above 4.0% in the knowledge that the economy is strong enough to handle additional rate hikes. September was a disaster for the New Zealand dollar, which plunged 6.5% and fell to its lowest level since March 2020. With the US dollar taking a breather, NZD/USD has rebounded this week, with gains of 2.70%. The volatility could well continue, and the New Zealand dollar is likely to face more headwinds in the short term. First, the risk-related currency has been hit hard as risk apprehension has soared. The war in Ukraine has escalated and the energy crisis facing Western Europe could tip many countries into recession this winter. China’s economy has been slowing down, which means less demand for New Zealand exports. Second, the Federal Reserve remains in aggressive mode and is committed to curbing inflation, even if that results in a recession. US Treasury yields have been on an upswing, propelling the US dollar higher against most of the major currencies. NZD/USD Technical NZD/USD is testing support at 0.5712. Below, there is support at 0.5639 There is resistance at 0.5829 and 0.5902 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZD/USD - All eyes on RBNZ - MarketPulseMarketPulse

NZD/USD has failed to sustain the upside above 0.5800. While below 0.6010/0.6060, the downtrend is set to persist, economists at Société Générale report. 50-day moving average near 0.6010/0.6060 to be an important hurdle near-term “NZD/USD recently formed an interim low near the lower limit of a multi-month down sloping channel at 0.5565 which is also a trend line drawn since 2009.”  “An initial bounce is taking shape; the 50 DMA near 0.6010/0.6060 which is also the low of July is expected to be an important hurdle near-term. Failure to overcome this resistance can lead to continuation in downtrend towards last month trough of 0.5565 and 2020 levels of 0.5495/0.5470.”

Further consolidation within the 0.5610-0.5810 range looks likely in NZD/USD in the short term, comment Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group’s Global Economics & Markets Research. Key Quotes 24-hour view: “Yesterday, we held the view that NZD ‘is likely to advance further but the chance of a break of the major resistance at 0.5810 is not high’. While NZD rose to a high 0.5805, it plummeted to 0.5664 in NY trade before rebounding quickly to end the day at 0.5746 (+0.24%). The rebound has gained some momentum and the bias for today is on the upside. However, a break of the major resistance at 0.5810 is unlikely. Support is at 0.5720, followed by 0.5680.” Next 1-3 weeks: “Our update from Tuesday (04 Oct, spot at 0.5720) still stands. As highlighted, the recent weakness in NZD has stabilized. We view the current price movements as the early stages of a consolidation phase and we expect NZD to trade between 0.5610 and 0.5810 for now.”

NZD/USD started the day with gains but has reversed directions. The New Zealand dollar is trading at 0.5707, down 0.52%. RBNZ raises rates by 0.50% As expected, the Reserve Bank of New Zealand delivered a 0.50% hike, bringing the benchmark to 3.50%, its highest level since 2015. The RBNZ has now hiked rates at eight consecutive meetings and even discussed a super-size 0.75% increase at today’s meeting. The RBNZ has been aggressive with its rate-tightening cycle, and there’s likely more to come. The rate statement noted that “core consumer inflation is too high” and the labour market remains tight, a signal that the central bank will continue to tighten until inflation has peaked. This means that the November meeting will likely bring a rate hike of 0.50% or 0.25%, depending on economic data and the inflation picture. Inflation hit 7.3% in Q2, up from 6.9 in Q1. One of the dangers of a steep rate-tightening cycle is choking off economic growth and Moody’s rating agency said after today’s rate hike that a soft land was “increasingly unlikely”. The RBNZ might disagree, pointing to a 1.7% gain in GDP in Q2 and a robust labour market. The economy has proven strong enough to bear sharp rate hikes and Governor Orr is looking for a peak in inflation before easing up on rates. September was a disaster for the New Zealand dollar, which plunged a staggering 8.5% and fell to its lowest level since March 2020. NZD/USD has rebounded 2.0% in October, but the currency faces significant headwinds. The escalating conflict in Ukraine, which has seen President Putin annex 15% of Ukrainian territory, and a hawkish Federal Reserve are likely to continue weighing on the New Zealand dollar in the short term. NZD/USD Technical NZD/USD is testing support at 0.5712. Below, there is support at 0.5639 There is resistance at 0.5829 and 0.5902 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Economist at UOB Group Lee Sue Ann reviews the latest interest rate decision by the RBNZ. Key Takeaways “As expected, the Reserve Bank of New Zealand (RBNZ) decided to raise its official cash rate (OCR) by 50bps again to 3.50%. This is the fifth consecutive month that the RBNZ has raised rates by 50bps.” “We see the RBNZ on track to continue hiking the OCR to 4.00% by the end of this year, as per our forecasts. Thereafter, we see the RBNZ on hold, as we are mindful that it will not want the economy to tip over into recession and for unemployment to rise sharply, as it aims to strike a balance with higher interest rates slowing the economy and inflation. House prices are plunging at a fast pace.” “Risks, however, remain skewed towards more rate hikes in 1Q23, and thus an OCR higher than 4%, before the RBNZ pauses in the current tightening cycle. We will be monitoring both local and global developments and reviewing our OCR trajectory if necessary. The next RBNZ meeting is on 23 Nov, and this will also be the last monetary policy meeting for 2022.”

NZD/USD is lower, sinking back to the mid-0.56s. Economists at Bank of America target the pair at 0.56 by year-end. NZD to underperform AUD “We revise down our end-2022 forecast for NZD/USD to 0.56 (previously 0.65) with recent developments making a return to the 0.60s unlikely in 2022. Poor global economic and financial conditions suggest a move below our year-end forecast is likely in the near term.” “We continue to expect NZD to underperform AUD, the latter better poised to benefit from China’s easing in commodity-intensive sectors.”  

The NZD/USD pair has slipped below the 0.56 mark. Economists at ANZ Bank note that the kiwi lacks positive attention at present. Local factors are simply not featuring “Local factors are simply not featuring, and anecdotally, NZ’s current account deficit is attracting more unwanted attention.” “In a world where US interest rates are leading the way higher, the NZD needs positive rather than negative attention, and that seems to be lacking at present.” “Support 0.5470/0.5565 Resistance 0.5820/0.6000/0.6160.” See – NZD/USD: Unlikely to return to 0.60 in 2022, seen at 0.56 by year-end – BofA

NZD/USD prints four-day downtrend to refresh 2.5-year low. RBNZ’s Orr, mixed Fedspeak failed to trigger corrective bounce as yields renew multi-year high. US inflation, Fed Minutes will be crucial for the week but bears are likely to keep the reins. NZD/USD bears hold onto the control as the quote renews a 31-month low around 0.5535, close to 0.5545 heading into Tuesday’s European session. The kiwi pair’s latest fall takes clues from the broad US dollar strength as traders rush towards the risk safety amid the first day of full markets. In doing so, the quote ignores the early Asian session comments from the Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr. That said, RBNZ’s Orr reiterated that there is more work to do to reduce inflation. Also could have challenged, but ignored, were the mixed comments from the Fed policymakers. Chicago Fed President Charles Evans said on Monday that the US can lower inflation relatively quickly without recession or a large increase in unemployment. The policymaker also added that the Fed needs to "carefully and judiciously" navigate to a "reasonably restrictive" policy rate. It should be noted that Federal Reserve Vice Chair Lael Brainard made the case for cautious rate hikes for the future, per the Wall Street Journal (WSJ). It’s worth noting that the US Dollar Index (DXY) prints 0.21% intraday gains as it prints a five-day uptrend near 113.40. In doing so, the greenback’s gauge versus the six major currencies traces the US Treasury yields as the US 30-year Treasury yields rise to a fresh high since January 2014 whereas the 10-year counterpart pokes the 4.0% threshold. Also favoring the DXY is the CME’s FedWatch Tool which signals a 78.4% chance of the Fed’s 75 bps rate hike in November. Furthermore, the recently fierce Russia-Ukraine tussles and the Sino-American tensions add strength to the risk-aversion wave that drowns the NZD/USD prices. While portraying the mood, the S&P 500 Futures that drop 0.50% as bears lean towards the monthly low. Moving on, multiple Fed policymakers are up for speeches during the day and can entertain NZD/USD traders, mostly the sellers. However, major attention will be given to the Federal Open Market Committee (FOMC) Meeting Minutes and the US Consumer Price Index (CPI) data for September, up for publishing on Wednesday and Thursday respectively. Technical analysis A clear downside beak of the previous monthly low directs NZD/USD towards the year 2020’s bottom surrounding 0.5470.

NZD/USD fades bounces off 31-month low, retreats from intraday high of late. Support-turned-resistance limits immediate upside ahead of 100-HMA, weekly falling trend line. Bears should wait for a clear break of 0.5560 for conviction. NZD/USD struggles to defend the previous day’s corrective bounce from the 2.5-year low, easing to 0.5580 ahead of Wednesday’s European session. In doing so, the Kiwi pair takes a U-turn from the two-week-old previous support line, near 0.5595 at the latest. The pullback moves also gain support from the quote’s failure to cross the 100-HMA on Tuesday, despite refreshing the weekly top. However, an upward-sloping trend line connecting the recent lows, around 0.5560, limits the quote’s immediate declines ahead of directing them to the recent trough surrounding 0.5535. In a case where the NZD/USD pair remains bearish past 0.5535, which is more likely considering the absence of the oversold RSI, the south-run could aim for the 0.5500 threshold and the year 2020 low near 0.5470. Meanwhile, an upside break of the immediate support-turned-resistance line, at 0.5595 now, needs validation from the 0.5600 to convince intraday buyers of the NZD/USD. Even so, the 100-HMA and the weekly resistance line, respectively around 0.5625 and 0.5655, could challenge the bulls before giving them control. NZD/USD: Hourly chart Trend: Further downside expected

NZD/USD is juggling above 0.5600 as the focus has shifted to the US inflation data. Investors are going light towards the US inflation event. Business NZ PMI is seen lower due to the extremely tight RBNZ policy. The NZD/USD pair is displaying topsy-turvy moves in the early European session as investors have shifted sideways ahead of the US inflation. Considering the worth of September’s inflation report, investors are going light and will prefer to make an informed decision post-release. The risk profile has been muted as volatility has contracted dramatically. Meanwhile, the 10-year US Treasury yields have blocked around 3.92% and the US dollar index (DXY) is barricaded into the chartered territory. The mighty DXY is hovering around the immediate hurdle of 113.30. Wednesday’s hawkish Federal Reserve (Fed) minutes and mixed Producer Price Index (PPI) data failed to fetch a power-pack action in the DXY. The Fed minutes dictated that Fed policymakers are in favor of keeping the policy extremely tight as the achievement of price stability is the foremost priority. Also, the sustainability of the tight policy for a period is highly crucial until the price pressures decline for several months. The consideration of US inflation projections indicates that the headline Consumer Price Index (CPI) will decline to 8.1% while the core CPI will land higher at 6.5%. Uncertainty over the US CPI data has reached the rooftop as it will provide lucidity over the likely monetary policy action by the Fed, scheduled for the first week of November. On the kiwi front, investors are focusing on the Business NZ PMI data, which is due on Friday. The economic data is seen lower at 52.5 vs. the prior release of 54.9. It seems that the consequences of restrictive policy by the Reserve Bank of New Zealand (RBA) are playing out now as firms have postponed their expansion plans due to higher interest obligations. Apart from that, China’s CPI data will be keenly watched. As per the consensus, the annual CPI data will accelerate to 2.8%.

USD/CAD Current spot: 1.3722 • We haven’t changed our view that the loonie should emerge as a key outperformer once sentiment stabilises, thanks to low exposure to Europe and China, the positive impact from high energy prices and a hawkish Bank of Canada (which recently reiterated its commitment to fighting inflation despite economic pain). • Still, CAD’s high beta and USD strength will keep USD/CAD in the 1.35/1.40 region into the new year, in our view, regardless of the BoC matching the Fed’s tightening. • The recent output cuts by OPEC+ are surely a good sign for oilsensitive currencies, and may somewhat limit the downside risks for CAD even if risk assets remain weak. AUD/USD Current spot: 0.6323 • We remain bearish on AUD/USD into year-end, as risk sentiment fragility, China’s economic (and currency) woes and a strong USD all point to continuous weakness in the pair. • We currently forecast a bottom of about 0.60-0.61 around yearend before a rebound that should accelerate in the second half of 2023. A break below 0.60 this year is entirely possible though. • The Reserve Bank of Australia surprised on the dovish side in October as it delivered a “small” 25bp hike. Indeed, policymakers in Australia have greater flexibility given policy meetings are scheduled for each month; but our base case is that 25bp increases will become the norm. The FX implications, for now, should remain quite secondary. NZD/USD Current spot: 0.5603 • The Reserve Bank of New Zealand has steered away from any dovish signals as it hiked by another 50bp in October and signalled more tightening is on the way. Another 50bp increase is largely expected at the November meeting. • As with the Australian dollar – and many other developed currencies – the role of monetary policy remains secondary compared to global risk dynamics. • NZD/USD is looking at the 0.50 2009 lows as the next key support: that would be a 12% drop from the current levels and seems too stretched in our view. However, a move to the 0.52-0.53 area cannot be excluded should risk assets fall further. This article is a part of a report by ING Economics available here. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

NZD/USD ended last week lower. The focus now shifts to NZ Consumer Price Index (CPI) data due out at 21:45 GMT, economists at ANZ Bank report. NZD has a few legs of support “The NZD has a few legs of support – RBNZ leadership, high-interest rates, and a surprisingly resilient economy. The only trouble is, the USD has most of that too. That leaves us much more neutral on the Kiwi outlook in a broad sense. But NZ CPI data tomorrow could shift the dial, especially if it heralds a change in monetary policy expectations.” “Support 0.5470/0.5510 Resistance 0.5820/0.6000/0.6160”

A combination of supporting factors pushes NZD/USD higher for the second straight day. Hotter-than-expected domestic consumer inflation figures boost the New Zealand dollar. A softer US bond yields, the risk-on impulse weighs on the USD and remains supportive. The NZD/USD pair hits a one-and-half-week high during the first half of trading on Tuesday, with bulls now awaiting sustained strength beyond the 0.5700 round-figure mark. A combination of factors allows the NZD/USD pair to gain strong follow-through traction for the second successive day and recover further from its lowest level since March 2020 touched last week. The New Zealand dollar gets a strong boost from hotter domestic consumer inflation figures, which smashed estimates and lifted bets for a more aggressive rate hike by the RBNZ. Apart from this, the prevalent US dollar selling bias further contributes to the ongoing positive move. In fact, the USD Index, which measures the greenback's performance against a basket of currencies, drops to over a one-week low amid a softer tone surrounding the US Treasury bond yields. Apart from this, the risk-on impulse exerts additional downward pressure on the safe-haven buck and benefits the risk-sensitive kiwi. With the latest leg up, the NZD/USD pair seems to have confirmed a bullish breakout through the 0.5650 supply zone and seems poised to appreciate further. That said, a combination of factors might hold back bulls from placing aggressive bets and keep a lid on any meaningful upside. Concerns about the economic headwinds stemming from rapidly rising borrowing costs, geopolitical risks and China's zero-COVID policy could cap the optimistic move in the markets. Furthermore, growing acceptance that the Fed will continue to hike interest rates at a faster pace should act as a tailwind for the USD. This, in turn, warrants caution for bullish traders. Market participants now look forward to the US economic docket, featuring the release of Industrial Production data and Capacity Utilization Rate later during the early North American session. This, along with the US bond yields and the broader market risk sentiment, will influence the USD price dynamics and provide some impetus to the NZD/USD pair. The focus will then turn to important macro data from China, due for release during the Asian session on Wednesday.

With inflation continuing to run hot, economists at Westpac have revised up their forecast for the Official Cash Rate. They now expect the cash rate to peak at 5%. Inflation refuses to die, activity holding firm “We now expect the OCR to reach a peak of 5% for this cycle (previously 4.5%).” We expect a 75 basis points hike to 4.25% at the upcoming November Monetary Policy Statement, a step up from the 50 bps increases in the last few reviews.”  “Inflation is continuing to run red-hot across the economy, and core inflation is yet to show signs of easing despite the sharp rise in interest rates over the past year.” “We are also seeing ongoing firmness in domestic economic conditions, including a drum-tight labour market and resilience in household demand.”  

Summary:  Risk sentiment was supported by more U-turns in UK fiscal policy and strong earnings from Bank of America supporting the US banks. Equities rallied and the USD declined, but the Japanese yen failed to ride on the weaker USD and continued to test the authorities’ patience on intervention. Higher NZ CPI boosted bets for RBNZ rate hikes, and the less hawkish RBA meeting minutes brought AUDNZD to fresh lows. EU meetings remain key ahead as the bloc attempts to finalize Russian price caps. What’s happening in markets?   The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) rally after UK-policy U-turn. So far this reporting season earnings are declining The mood was risk-on amid Monday’s rally; with the major indices charging higher with the S&P500 up 2.7%. The breadth of the rally was so strong that at one point over 99% of the companies in the S&P500 were rising, which pushed the index up away from its 200-week moving average (which it fell below last week). Meanwhile the Nasdaq 100 gained 3.5%. The rally came after the UK made $30 billion pounds worth of savings after scrapping tax cuts (see below for more). It was received well by markets and investors looking for short term relief. Bond yields fell, equities rallied and after the GBP lifted 1.6% the US dollar lost strength. But the UK is not out of the lurch with power outages likely later this year. Plus also consider, so far this US earnings season, only 38 of the S&P500 companies have reported results and earnings growth has so far declined on average by 3%. So it’s too soon to gauge if markets can sustain this rally, particularly with the Fed likely to hike rates by 75 bps later this month and next. Strong earnings from bank boosted market sentiment. Bank of America (BAC:xnys), reporting solid Q3 results with net interest income beat and a 50bp sequential improvement on CET1 capital adequacy ratio, surged 6% and was one of the most actively traded stock on the day. U.S. treasury curve (TLT:xnas, IEF:xnas, SHY:xnas) steepened Initially US treasuries traded firmer with yields declining, after taking clues from the nearly 40bps drop in long-dated U.K. gilts following the new U.K. Chancellor Hunt scrapping much of the "mini budget" tax cuts and the support for household energy bills. Some block selling in the long-end treasury curve however took 30-year yields closing 3bps cheaper and 10-year yields little changed at 4.01%. The 2-year to 5-year space finished the session richer, with yields falling around 5bps and 2-year closed at 4.44%. The market has now priced in a 5% terminal Fed fund rate in 2023 and a 100% probability for a 75bps hike in November and over 60% chance for another 75bps hike in December. Australia’s ASX200 (ASXSP200.1) lifts 1.4%; with a focus on Uranium, stocks exposed to the UK and lithium Firstly Lithium stocks are in the spotlight after Pilbara Minerals (PLS) accepted a new sales contract to ship spodumene concentrate for lithium batteries from Mid-may, at $7,100 dmt. PLS shares are up 3.1% with other lithium stocks rising including Core Lithium (CXO) up 3.7% and Sayona Mining (SYA) up 4.7%. Secondly, shares in Uranium are focus today after Germany plans to extend the life of the countries three nuclear power plants till April, as it contends with the energy crisis. The Global Uranium ETF (URA) rose 5.9% on Monday and ASX uranium stocks are following suit like Paladin (PDN) up 2%. For a deep look at the uranium/nuclear sector, covering the stocks to perhaps watch and why read our Quarterly Outlook on the Nuclear sector here. Thirdly, amid the risk-on short term relief in markets from the UK, companies with UK exposure are rallying amid the short-term sentiment shift , including the UK’s 5th biggest bank, Virgin Money (VUK) which is listed on the ASX and trades up 5.3%. Ramsay Health Care (RHC), which is a private hospital/ health care business with presence in the UK trades up almost 2% today. Ramsay's recent full-year showed UK revenue doubled to $1.2 billion. Hong Kong’s Hang Seng (HSIV2) China’s CSI300 (03188:xhkg) Stocks in Hong Kong and mainland China traded lower initially and spent the rest of the day climbing to recover all the losses, with Hang Seng Index and CSI300 finishing marginally higher. General Secretary Xi’s speech last Sunday hailed China’s “Dynamic Zero-Covid” strategy and gave no hint of shifting policy priorities toward economic growth as some investors had hoped for. Among the leading Hang Seng constituent stocks, HSBC (00005:xhkg) gained 1.5% and the Hong Kong Stock Exchange (00388:xhkg), which is reporting Q3 results on Wednesday, climbed 2.3%. Chinese banks gained, with China Merchant Bank rising 2.3% and ICBC (01389) up 1.7%.  Healthcare names gained, Hansoh Pharmaceutical (03692:xhkg) surged 13.2% and Sino Biopharm (01177:xhkg) rose 3.6%. EV stocks were among the laggards, dropping from 1% to 5%. Li Ning (02331:xhkg) tumbled over 13% at one point and finished the trading day 4.3% lower following accusations on mainland social media about the sportswear company’s latest designs resembling WWII Japanese army uniforms.  Japanese yen paying no heed to jawboning efforts The US dollar moved lower on Monday, but that was no respite for the Japanese yen. All other G10 currencies got a boost, with sterling leading the bounce against the USD with the help of dismantling of the fiscal measures by the newest Chancellor of the Exchequer Jeremy Hunt and the slide in UK yields. The only G10 currency that weakened further on Monday was the JPY, which continued to test the intervention limits of the authorities. USDJPY rose to 149.08, printing fresh 42-year highs. Bank of Japan Governor Kuroda will be appearing before the Japanese parliament from 9.50am Tokyo time, after some stern remarks in the morning saying that they “cannot tolerate excessive FX move driven by speculators”. While intervention expectations rose, the yen still did not budge until last check. NZD rose on higher New Zealand CPI boosting RBNZ tightening bets Another surprisingly strong inflation print from New Zealand, with Q3 CPI easing only a notch to 7.2% y/y from 7.3% y/y against consensus expectations of 6.5% y/y and an estimate of 6.4% from the RBNZ at the August meeting. The q/q rate rose to 2.2% from 1.7% in Q2 and way above expectations of 1.5%. This has prompted expectations of more aggressive tightening from the RBNZ with a close to 75bps hike priced in for the Nov 23 meeting vs. ~60bps earlier, and the peak in overnight cash rate at over 5.3% from ~5% previously. NZDUSD rose to 0.5660 with the AUDNZD down to over 1-month lows of 1.1120 with RBA minutes due today as well for the October meeting when the central bank announced a smaller than expected rate hike of 25bps. Crude oil (CLX2 & LCOZ2) Crude oil prices stabilized in early Asian hours on Tuesday after a slight decline yesterday, despite a weaker dollar and an upbeat risk sentiment. WTI futures rose towards $86/barrel while Brent was above $91. Chinese demand concerns however weighed on the commodities complex coming out of the weekend CCP announcements. On the OPEC front, Algeria's Energy Minister echoed familiar rhetoric from the group that the decision to reduce output is a purely technical response to the world economic circumstances.   What to consider? UK need to know: Policy U-Turn provides shorter term risk-on rally, but long-term headwinds remain, UK holds talks to avoid power shutdowns New British chancellor Jeremy Hunt reversed almost all of PM Liz Truss’ mini-budget. Initially Truss’ plans sent markets into a tailspin - whereby the pound hit record lows and the Bank of England was forced to intervene. However, after Hunt virtually scrapped all of the announced tax cuts, and cut back support for household energy bills, saving $32 billion pounds, then risk sentiment improved and the pound gained strength. But, the issue is, firstly; there are still almost $40 billion pounds worth of savings to be made to close the fiscal gap; meaning more government spending cuts will come and possibly tax hikes. This is probably why new UK finance chief, Hunt, declined to rule out a windfall profit tax. Nevertheless, the U-turn was received well by markets for the short term, bond yields fell, equities rallies and the pound sterling (GPBUSD) rose 1.6% against the USD with the US dollar losing strength. And the second reason the UK is not out of the lurch is that the fundamentals haven’t changed; the UK energy crisis is not resolved – yesterday in the UK government officials met major data centers discussing the need to use diesel as backup if the power grid goes down in the coming months. Amazon.com and Microsoft run data centers in the UK. Earlier this month, National Grid also warned some UK customers they could face 3-hour power cuts on cold days. The Bank of England is expected to downgrade its rate hike expectations.    NY Fed manufacturing headline lower on mixed components The NY Fed manufacturing survey for October fell to -9.1, contracting for a third consecutive month and coming in below the expected -4.0 and the prior -1.5. While survey data remains hard to trust to decipher economic trends, given a small sample size and questioning techniques impacting results, it is worth noting that more factories are turning downbeat about future business conditions which fell 10 points to -1.8 and was the second weakest since 2009. Also, the prices paid measure rose for the first time since June, echoing similar results as seen from the University of Michigan survey. Fed speakers ahead today include Bostic and Kashkari and terminal rate expectations remain on watch after they are touching close to 5%. La Nina is underway in Australia; floods decimate some wheat crops In the Australian state of Victoria at the weekend, floods decimated some wheat crops, which has resulted in the price of Wheat futures contracts for March and May 2023 lifting in anticipation that supply issues will worsen. The Australian Federal Emergency Management Minister said parts of Australia face ‘some serious flooding’ with more rain forecast later this week, with 34,000 homes in Victoria potentially expected to be inundated or isolated. The Bureau of Meteorology forecasts the La Lina event to peak in spring that’s underway in the Southern Hemisphere, before turning to neural conditions early next year. La Nina is not only disastrous to lives, homes and businesses, but the extra rainfall usually brings about lot of regrowth when rain eases. The risk is, if El Nino hits Australia in 2023 for instance, bringing diminished rainfall and dryness, then there is a greater risk of grassfires and bushfires. Investors will be watching insurance companies like Insurance Australia Group, QBE. As well as companies that produce wheat, including GrainCorp and Elders on the ASX and General Mills in the US. RBA Meeting Minutes out – AUDUSD climbs of lows, up 1.7% The Aussie dollar rose 1.7% off its low after the USD lost strength when the UK re winded some tax cuts. The AUDUSD will be in focus with the RBA Meeting Minutes released, highlighted why the RBA rose interest rates by just 0.25% this month, moving from a hawkish to dovish stance. The RBA previously highlighted it sees unemployment rising next year, and sees inflation beginning to normalize next year, which in our view, implies the RBA will likely pause with rate hikes after December, after progressively making hikes of 25bps (0.25%). Still the Australian dollar against the US (AUDUSD) remains pressured over the medium term, given the Fed’s expected heavy-pace of hikes, while China’s commodity buying-power is restricted with President Xi maintaining a covid zero policy. As such, the AUD's rally might be questioned unless something fundamentally changes. China delays the release of Q3 GDP and September activity data Chin’s National Bureau of Statistics delays the release of Q3 GDP, September industrial production, retail sales, and fixed asset investment data that were scheduled to come on Tuesday without providing a reason or a new schedule.   For our look ahead at markets this week - Listen/watch our Saxo Spotlight.   For a global look at markets – tune into our Podcast. Source: https://www.home.saxo/content/articles/equities/market-insights-today-18-oct-18102022

NZD/USD was up sharply earlier in the day but has pared most of those gains. In the North American session, the New Zealand dollar is trading at 0.5663, up 0.49%. New Zealand inflation higher than expected New Zealand inflation jumped 2.2% MoM in the third quarter, higher than the estimate of 1.6%. On an annualized basis, inflation climbed 7.2% in Q3, down from 7.3% in Q2 but well above the consensus of 6.6%. Inflation remains stubbornly high and is running strong across the economy. Core inflation is not showing any signs of easing, despite the central bank’s sharp rise in interest rates, with most core inflation measures topping 6%. Domestic demand is holding up, driven by a robust labour market and firm consumer spending. Read next: JP Morgan Net Income Over $9B | Kanye West Is Buying Parler| FXMAG.COM With no indication that inflation is peaking, the Reserve Bank of New Zealand is expected to continue raising rates, perhaps as high as 5.0%, until inflation is finally brought under control. The cash rate is currently at 3.5%, and a 0.75% hike at the November meeting is a strong possibility. It will be difficult for the central bank to guide the economy to a soft landing if it continues to deliver oversize hikes, but so far the economy has shown strong resilience despite the Bank’s sharp tightening. The outlook for the New Zealand dollar does not look promising. September was a disaster for the New Zealand dollar, which plunged a staggering 8.5%. Last week, NZD/USD slipped to 0.5510, its lowest level since March 2020. The risk-sensitive currency faces significant headwinds. The escalating conflict in Ukraine, which has seen President Putin annex 15% of Ukrainian territory, a likely energy crisis in Europe this winter and a hawkish Federal Reserve are likely to continue weighing on the New Zealand dollar in the short term. NZD/USD Technical NZD/USD is testing resistance at 0.5657. Next, there is resistance at 0.5754 There is support at 0.5584 and 0.5487 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. New Zealand dollar extends rally - MarketPulseMarketPulse

NZD/USD is seeing a minor recovery, which economists at Credit Suisse look to be held at 0.5798/5813. Move below 0.5510 needed to turn near-term risk back lower “Whilst both daily RSI and MACD are holding bullish divergences, which suggests that the recovery will extend for now, our broader outlook remains outright bearish and we thus see this development only as a correction prior to an eventual move lower.” “Immediate support is seen at 0.5649 and next at 0.5617, though a move below the recent price low at 0.5510 is needed to turn near-term risk back lower and prompt a move to a major support level at the 2020 low at 0.5468.”  “Whilst we expect a better near-term ceiling to be found at the 0.5798/5813 level, above here would see scope to test the falling 55-day average at 0.5978.”

According to Markets Strategist Quek Ser Leang and Economist Lee Sue Ann at UOB Group, NZD/USD faces further side-lined trading in the next weeks, likely within the 0.5570-0.5755 range. Key Quotes 24-hour view: “We highlighted yesterday that NZD ‘could rise above 0.5725 but a sustained advance above this level still appears unlikely’. However, after rising to 0.5706, NZD dropped to a low of 0.5650. The current price movement is likely part of consolidation and NZD is likely to trade sideways between 0.5625 and 0.5695 for today.” Next 1-3 weeks: “Our update from two days ago (18 Oct, spot at 0.5675) still stands. As highlighted, NZD appears to have moved into a consolidation phase and is likely to trade between 0.5570 and 0.5755 for the time being.”

NZD/USD sellers attack short-term key support, extends the previous day’s pullback from weekly top. Eight-day-old rising wedge formation joins bearish MACD signal to keep bears hopeful. 200-HMA adds to the downside filters, bulls need validation from the monthly top. NZD/USD appears all set to confirm a one-week-old bearish chart pattern called a rising wedge as sellers poke the support line around 0.5650 heading into Friday’s European session. The kiwi pair refreshed the weekly top before reversing from 0.5743. Even so, the quote stays on the way to the biggest weekly gains since early August. Not only the rising wedge but bearish MACD signals also keep the NZD/USD sellers hopeful of breaking the support near the mid-0.5600s. Even so, the 200-HMA level of 0.5631 acts as an extra filter towards the south before welcoming the bears. Following that, the yearly low of 0.5511 marked in the last week could offer an intermediate halt during the theoretical target surrounding the 0.5400 mark. Alternatively, recovery moves may initially aim for the 61.8% Fibonacci retracement of October 03-13 downside, near 0.5700, before approaching the stated wedge’s upper line, close to 0.5755 by the press time. It should be noted that the NZD/USD pair’s run-up beyond 0.5755 needs validation from the monthly high of 0.5815 to convince the buyers. NZD/USD: Hourly chart Trend: Further weakness expected

NZD/USD has displayed a rebound move to near 0.5700 as DXY turns quiet after a roller-coaster move. Investors’ risk appetite has trimmed as S&P500 futures have surrendered their morning gains. The US S&P PMI data is expected to display a weaker performance ahead. The NZD/USD pair has defended the downside around 0.5720 as investors are shrugging off fears of China Xi Jinping’s third-term leadership announcement. The asset has started displaying reflex actions after a drop and is expected to recover ahead. Overall risk profile in the market is displaying a decline in investors’ risk appetite as S&P500 futures have surrendered major of their morning gains. The US dollar index (DXY) is eyeing stability after a roller-coaster ride and is continuously auctioning above the critical hurdle of 112.00. Returns on US government bonds have declined sharply. The 10-year US Treasury yields have tumbled to 4.16%, at the press time. The continuation of China’s XI Jinping leadership for the third time has created havoc for Chinese equities as the risk of a slowdown in economic prospects has escalated. It is worth noting that New Zealand is a leading trading partner of China and weaker Chinese prospects could lead to lower exports for the antipodean. Also, Monday morning’s China Trade Balance data impacted the kiwi bulls. The overall Trade Balance has accelerated to $84.74B vs. the expectations of $81.0B and the prior release of $79.39B. China’s export data has remained upbeat while their imports have remained flat at 0.3%, much lower than the estimates of 1%. A lower-than-projected Chinese imports data brought volatility in the kiwi counter. Going forward, the US S&P PMI data will be a key trigger for the asset. The Manufacturing PMI is expected to decline to 51.2 vs. the prior release of 52.0 while the Services PMI may drop to 49.2 from 49.3 reported earlier.

NZD/USD is now seen navigating the 0.5590-0.5810 band in the next weeks, suggest UOB Group’s Markets Strategist Quek Ser Leang and Economist Lee Sue Ann. Key Quotes 24-hour view: “The current movement is NZD appears to be part of a consolidation. For today, we expect NZD to trade between 0.5645 and 0.5750.” Next 1-3 weeks: “Yesterday, NZD rose to a high of 0.5675 before pulling back sharply. The price actions appear to be part of a consolidation phase and we expect NZD to trade between 0.5590 and 0.5800 for the time being. Looking ahead, NZD has to break clearly above 0.5810 before a sustained advance is likely.”

NZD/USD is oscillating in a 12-pip range as investors await US GDP data. US households are bound to postpone their new home demand due to higher interest obligations. ANZ Business Confidence dropped to -42.7 VS. projections of 42.0 and the prior release of -36.7. The NZD/USD pair has delivered a north-side break of the consolidation formed in a narrow range of 0.5740-0.5752 in the early European session. The asset is advancing towards the round-level resistance of 0.5800 as the risk-on impulse is aiming to regain the glory. S&P500 futures witnessed a vertical fall in early Asia led by weaker guidance from tech-giant Microsoft (MSFT), however, the three-day buying spree in the 500-stock basket indicates sheer optimism in the overall market structure. The US dollar index (DXY) is struggling to sustain above 111.00 and a subdued performance could accelerate volatility in the counter. Meanwhile, returns on US government bonds are declining sharply amid positive market sentiment. The 10-year US Treasury yields have dropped to 4.07% and have still not displayed any sign of exhaustion. For further guidance, investors are awaiting the release of the US Gross Domestic Product (GDP) data. As per the projections, the US economy has grown at 2.4% rate vs. a decline of 0.6% reported earlier in the third quarter of CY2022. It would be worth watching the placement of the GDP figures in comparison with the projections as Monday’s PMI numbers reported by S&P were lower than expectations. But before that, the US New Home Sales data will display the condition of the US real estate market. The economic catalyst is seen lower at 0.585M vs. the prior release of 0.685M on a monthly basis. In addressing mounting inflationary pressures, the Federal Reserve (Fed) is continuously accelerating interest rates. This has resulted in higher interest obligations for households, which has forced them to postpone their demand for new homes. In early Tokyo, ANZ Business Confidence dropped further to -42.7 against the projections of 42.0 and the prior release of -36.7. The kiwi dollar didn’t react much to the qualitative data, therefore, the entire focus will remain on the DXY’s movement and risk profile.

NZD/USD: The chart shows the movement of #NZD/USD on the 4-hour (H4) chart. Quotes reached the lower border of the resistance area of 0.5809, which is shown on the chart as two parallel lines. This area determines the dynamics of the trend for the coming days. However, there is a chance for a reversal towards 0.5530. And in case of a breakdown of the upper border of the resistance area of 0.5827, the pair will rush to a new target, that is, 0.6005. Good luck!   Relevance up to 13:00 2022-10-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325385

Further advance in NZD/USD needs to clear the 0.5880 barrier in the near term, noted Market Strategist at UOB Group Quek Ser Leang and Economist Lee Sue Ann. Key Quotes 24-hour view: “Our expectation for NZD to ‘trade between 0.5715 and 0.5785’ yesterday was incorrect as it lifted off and surged to a high of 0.5844. While overbought, the rapid rise has room to extend but a sustained rise above 0.5880 is unlikely. Support is at 0.5800, followed by 0.5770.” Next 1-3 weeks: “On Tuesday (25 Oct, spot at 0.5710), we held the view that NZD is likely to ‘consolidate and trade between 0.5590 and 0.5810 for the time being’. Yesterday (26 Oct), NZD rose above 0.5810 and soared to a high of 0.5844. Despite the rapid rise, upward momentum has not improved by much. That said, NZD could rise but it has to close above 0.5880 before further sustained advance is likely. Looking ahead, the next resistance is at 0.5920. Support is at 0.5770, but only a break of 0.5740 would indicate that NZD is not strengthening further.”

NZD/USD continues to gain ground and is higher for a third straight day. In the North American session, the New Zealand dollar is trading at 0.5865, up 0.60%. Business confidence drops The ANZ Business Outlook Survey for October, released yesterday, painted a grim picture of the health of the New Zealand economy. Business confidence fell to -42.7, down from -36.7 in September. The last time that business confidence was in positive territory was in May 2021, meaning that the lack of any optimism by businesses is nothing new. What does give cause for worry is the rise in inflation expectations, which rose to 6.13%, up slightly from 5.98% in September. The uptick in inflation expectations is clearly linked to the rise in inflation for Q3, which came in at 7.2% YoY in Q3, after a 7.3% gain in Q2. This was higher than the consensus of 6.6%. On a quarterly basis, CPI jumped 2.2%, up from 1.7% and much higher than the consensus of 1.6%. This nasty surprise means that the Reserve Bank of New Zealand will likely respond with an oversize hike of 0.75% at the November 23rd meeting. The cash rate is currently at 3.5% and the hot inflation report has analysts projecting that the cash rate won’t peak until 5.0% or even higher in early 2023. It’s difficult to see how such a steep rate-tightening cycle will not trigger a recession, but the Reserve Bank appears to have little choice but to remain aggressive, given that the Bank is further behind inflation than it had expected. What is especially troubling about inflation is that it remains broad-based and core inflation continues to move higher. In the US, third-quarter GDP roared back at 2.6%, following two consecutive quarters of negative growth, which technically met the definition of a recession and garnered lots of headlines. This was higher than the 2.4% consensus and indicates that the economy is in good shape. What is less encouraging is that consumer spending has slowed, with personal consumption rising by 1.4%, down from 2.0% in Q2. NZD/USD Technical NZD/USD is testing resistance at 0.5835. Next, there is resistance at 0.5912 There is support at 0.5774 and 0.5616 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. New Zealand dollar extends rally - MarketPulseMarketPulse

NZD/USD has sensed selling pressure at around 0.5870 as the DXY has rebounded. Risk sentiment is turning averse as S&P500 futures have extended their morning losses. A slowdown in consumer spending has trimmed hawkish Fed bets. The NZD/USD pair has witnessed a corrective move after facing hurdles around the critical resistance of 0.5870 in the early European session. The asset has failed to cross Thursday’s high decisively as the US dollar index (DXY) has rebounded after sensing buying interest around 110.30. Meanwhile, risk sentiment is turning averse as S&P500 futures have extended their morning losses. Bleak growth projections presented by US tech companies are weighing pressure on the US 500-stock basket. The 10-year US Treasury yields have resurfaced firmly despite declining bets for a hawkish Federal Reserve (Fed). At the press time, the 10-year yields are trading at 3.95%, 0.29% higher than their prior release. The CME FedWatch tool is displaying the odds of 75 basis points (bps) rate hike at 84.8%. A slowdown in consumer spending has triggered chances of exhaustion in inflationary pressures. For the third quarter, consumer spending expanded by 1.4% vs. a prior expansion of 2.0%. A decline in household demand may restrict further price growth for goods and services. Going forward, investors will go busy with the monetary policy event by the Federal Reserve (Fed), which is scheduled for Wednesday. On the NZ front, a significant decline in China’s GDP projections could weigh on kiwi bulls as New Zealand is a leading trading partner of China. Global institution International Monetary Fund (IMF) has slashed Gross Domestic Product (GDP) forecast for China, citing Covid-19 lockdowns and the real estate crisis as responsible for a decline in economic activities. The latest review from IMF dictates that "Risks to the banking system from the real estate sector are rising because of substantial exposure." Projections for GDP have been trimmed to 3.2% vs. prior estimations of 4.4%.

The NZD/USD pair is trading in the green at 0.5824 at the time of writing. In the short term, it's trapped within a range pattern, so only escaping from this formation could bring new trading opportunities. It's fighting hard to stay higher and resume its rebound as the AUD/USD pair increased a little as well. The Australian Retail Sales came in better than expected, Private Sector Credit came in line with expectations, while MI Inflation Gauge rose by 0.4%. The US is to release the Chicago PMI and the Loan Officer Survey but I don't think that the economic data could have an impact. Tomorrow, the RBA is expected to increase the Cash rate from 2.60% to 2.85%, while the FOMC should increase the Federal Funds rate by 75bps again on Wednesday. The fundamentals could drive the price during the week. The US ISM Manufacturing PMI and JOLTS Job Openings and the New Zealand Unemployment Rate and Employment Change represent high-impact events tomorrow as well. NZD/USD Strong Upside Pressure! As you can see on the H1 chart, the pair continues to move sideways between 0.5787 and 0.5870 levels. Dropping below the ascending pitchfork's median line (ML) after failing to make a new higher high signaled exhausted buyers. Now, it could challenge the median line which stands as a dynamic resistance. Staying below it, NZD/USD could drop deeper. NZD/USD Forecast! A new higher high, jumping and closing above 0.5870 activates further growth and brings new longs in NZD/USD. Registering only false breakouts through the median line (ML) and making a new lower low, a valid breakdown below the pivot point of 0.5780 announces a deeper drop and helps the sellers to go short.   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/298959

NZD/USD takes the bids to refresh intraday high, bracing for the biggest daily gains in a week. Upbeat New Zealand Building Permits, softer yields direct buyers towards monthly resistance line. US ISM, S&P Global PMIs precede speech from RBNZ’s Orr, New Zealand Q3 jobs report to entertain pair traders. Hawkish hopes from RBNZ lure bulls amid mixed concerns over the Fed. NZD/USD bulls attack the 50-DMA resistance for the first time since late August as it cheers the US dollar pullback during early Tuesday. In doing so, the Kiwi pair grinds higher around 0.5865 while bracing for the biggest daily gains in a week. That said, the US Dollar Index (DXY) slides to 111.05 during the first loss-making day in four while the benchmark 10-year Treasury yields fade two-day uptrend by making rounds to 4.05% of late. In addition to the broad US dollar weakness, strong data from New Zealand (NZ) and hawkish hopes from the Reserve Bank of New Zealand (RBNZ) also support the NZD/USD pair’s recent upside moves. Earlier in the day, New Zealand’s seasonally adjusted Building Permits for September jumped by 3.8% versus -1.2% expected and -1.6% prior. Additionally, China’s Caixin Manufacturing PMI, 49.2 in October versus 49.0 expected and 48.1 prior, also favored the Kiwi pair’s run-up. Firmer sentiment in China, amid hopes of more stimulus, also strengthen the NZD/USD prices during a sluggish day heading into the key data/events. “The safe-haven greenback got some support from overnight losses on Wall Street, but a rise in US stock futures and firmness in Asian stocks, led by China, scuppered that demand on Tuesday. Lower long-term US Treasury yields also removed a crutch for dollar strength,” stated Reuters. Moving on, quarterly employment numbers and comments from Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr will be crucial for the pair’s direction. Should the strong fundamentals surrounding New Zealand joins hawkish comments from RBNZ and firmer NZ jobs report, the pair has a further upside to track. It should be noted, however, that the Fed’s hawkish commentary and hesitance to discuss slow rate hikes starting from December might bolster the US dollar and weigh on the quote. Furthermore, the scheduled prints of the US ISM Manufacturing PMI and S&P Global PMIs for October might also entertain traders. Technical analysis NZD/USD pokes the 50-DMA hurdle for the first time since August but the recently firmer RSI and bullish MACD signals favor the buyers to cross the immediate moving average resistance near 0.5855. However, an upward-sloping trend line from October 06, close to 0.5880 at the latest, appears a tough nut to crack for the pair buyers. Alternatively, pullback remains elusive unless breaking the 0.5700-5695 support confluence including the 21-DMA and a three-week-old rising trend line.

Summary:  Higher-than-expected US job openings data and a still-strong ISM manufacturing print pushed the US yields higher as terminal Fed pricing topped 5% again. This saw equity markets on the backfoot ahead of the Fed meeting scheduled for later today, and mixed earnings results from AMD and Airbnb also underpinned, while Sony jumped higher as FX effects supported better than expected results and improved guidance. Shares of Asian mining companies tied to nickel and copper may move after the metals rallied on speculation Beijing will make preparations to ease China’s stringent Covid rules. NZ jobs gains may support more RBNZ rate hikes but NZD remained cautious. What is happening in markets? The Nasdaq 100 (USNAS100.I) & S&P 500 (US500.I) fall on solid labor market data, which supports an aggressive Fed hike path The US major indices fell on Tuesday, with the S&P500 ending 0.4% lower, after erasing the 1% earlier gain, while the Nasdaq 100 met a similar fate before ending 0.9% lower. Two-year Treasury US yields , which are most sensitive to imminent Fed moves, topped 4.5% after sliding as much as eight basis points earlier in the day. The added volatility and risk-off mode came after US job openings unexpectedly rebounded in September amid low unemployment. This will likely fuel further wage gains (inflation), and it means the Fed will likely hike by 75-bp (0.75%). But keep in mind, any hint of a dovish pivot on Wednesday could perhaps prompt an outsized market reaction and risk on rally. Big tech weighed on equities, with Apple (AAPL) down almost 2%, and Amazon (AMZN) falling 5.5%, taking its value below $1 trillion for the first time since 2020. On the upside, investment banks did well include JP Morgan (JPM) up 1.8% and Goldman (GS) up 1.2%. While in the S&P500 Abiomed (ABMD) shares rose 50% with Johnson & Johnson, announcing it will takeover the firm for $17.3 billion, building on its portfolio of technology assisting heart function. After market, Advanced Micro Devices (AMD) shares rose almost 5% after its profits beat expectations and it signaled that inroads in the server chip market will continue to bolster its finances. The Dow Jones traded near a resistance level, that saw the index halt a few rally attempts, in the past few months.  China/HK stocks surge on unofficial reports that China may be looking to exit Zero Covid The CSI300 surged over 3.5% on Tuesday and the HSI rose by over 5% on speculation that Beijing is preparing to phase out Covid Zero policies, even as the country’s Foreign Ministry said it was unaware of such a plan. Unverified social media posts circulated online on Tuesday showed a committee was being formed to assess scenarios on how to exit Covid Zero. Internet giants Meituan and Tencent were some of the biggest gainers. While the reports may be unconfirmed for now, it gives a signal on how strong a recovery can come through if China alters its Zero Covid policy stance at some point. Australia’s ASX200 (ASXSP200.1) futures suggest a flat start, but focus will be on copper and nickel giants, and companies with USD exposure Focus will be on nickel and copper companies including Nickel Mines (NIC), Oz Minerals (OZL), and BHP (BHP), which are expected to gain attention and possibly move higher after the commodities prices rallied on speculation Beijing could make preparations to ease China’s stringent Covid rules, which have kept commodities prices underwater. BHP shares rose 3.7% in New York, and the listed entity in Australia is expected to likely follow. Focus will also be in Amcor (AMC) which has just reported financial results, declaring a stronger dividend that expected, stronger EPS than expected, but weaker than expected income, weighed down by the strength of the US dollar. The global packaging giant sees its full year financial results being negatively impacted by the US dollar by 5%, up from its prior 2% estimate. NZDUSD brushes off a broadly positive employment report NZ jobs data for Q2 was rather mixed with unemployment rate still near record lows, while rising slightly to 3.3% and wage growth of 2.6% YoY much higher than last month’s 2.3%. Employment change slowed slightly to 1.2% YoY but was far better than expectations of 0.3%, and also up 1.3% QoQ. While these numbers underscore a case for still-higher inflation and the need for further rate hikes from the RBNZ, NZD remained largely unchanged in early Asian trading hours after the release. NZDUSD eased from overnight highs of 0.5900 to trade around 0.584, while AUDNZD is testing the downside at 1.094 after breaking below 1.10 yesterday following a dovish RBA. While NZDUSD will continue to focus on what the Fed path brings, there may be more downside in store for AUDNZD amid the policy divergence of the RBA and RBNZ, unless one of the two things change: 1. RBNZ pivots to a pace of smaller rate hikes, or 2. China sends signals of opening up. This will bring the focus back on current account differentials which favour the AUD over the NZD. RBNZ’s financial stability report also highlighted some concerns from higher interest rates on consumption and new residential construction. Metals run higher on China speculation Copper and nickel led a surge in base metals on unconfirmed speculation Beijing is preparing to ease Covid rules, even as these reports were later denied by Chinese Foreign Ministry official. This also brought the focus back on supply issues in Copper, with inventories running low on exchanges. LME Nickel was over 8% higher as well, along with Zinc and Aluminium as well. Iron ore (SCOA) moved up slightly as a result, adding 0.3% to $78.35. Gold (XAUUSD) rose back towards $1650 but higher bond yields continue to haunt especially ahead of the critical Fed meeting. Silver, enjoying a trifecta of support from rising gold and copper as well as the weaker dollar, traded up to once again challenging resistance at $20/oz. A break may bring the key $21.14 back into focus. Crude oil (CLX2 & LCOZ2) Oil prices also gained on the China news, while a weaker USD up until the release of the US job openings or the ISM data also supported gains in oil. OPEC+ production cuts continue to keep the supply outlook tight for the oil market, but the overall sentiment is muddled by weakening global demand concerns and also the EU sanctions on Russian crude that are set to begin in December. WTI futures were seen rising towards $89/barrel while Brent futures were close to $95.   What to consider? US job openings and ISM manufacturing complicate Fed’s message US job openings saw an unexpected rebound in September amid low unemployment, suggesting more wage gains could be in store. JOLTS job openings came in higher at 10.7 million in September from a revised 10.3 million in August. This likely thrashes expectations of any material downshift from the Fed after today’s widely expected 75bps increase. Meanwhile, October's ISM manufacturing index also remained in expansion at 50.2, albeit falling from last month’s 50.9. However, disinflationary trends were emphasised as the index of prices paid fell to an over 2-year low. Still, sticky shelter and services inflation remains materially high suggest still-higher interest rates remain on the horizon. Terminal rate pricing for Fed funds futures has picked up again to 5% levels, and it would be hard for the Fed to push it any higher at this point, but what it can clearly hint at today is pushing out of the rate cut expectations for next year. Read our full FOMC preview here for further insights. Lack of insurance halted UN Black Sea shipments, but progress being made The UN halted grain shipments from Ukraine's Black Sea ports on Wednesday, after Russia warned ships weren't safe using the route and demanded guarantees from Ukraine. However, reports suggested early on Wednesday that an agreement had been reached and ships will start to sail again from Thursday, as pressure on Russia continues to build. We continue to watch crop and fertilizer prices, as a meaningful reversal could come through if we see improving shipments across the Black Sea region. RBA ups inflation forecasts, downgrades GPD, remains dovish. Possibly market implications if rate hikes stop early, as they have historical The RBA hiked the cash rate by 25bps (0.25%) as expected to 2.85%, maintaining its dovish stance and bordering on restrictive, as it again acknowledged tighter financial conditions are yet to be felt in mortgage payments, but higher rates and inflation has put pressure on household budgets and caused a small amount of loan arrears and insolvencies. The RBA’s rate hike cycle since May, has been the second fastest in history and we also note the RBA was the first major central bank to under-deliver on rate hike expectations (last month). Also consider, what’s ahead. The RBA has a history of stopping rate hikes early, before CPI peaked in YoY terms. Over the last 30 years the RBA started easing ‘early’ and cut rates despite headline CPI staying above its 2-3% target. So, could the RBA replay this trend? We think so. The RBA rose its 2022 CPI forecast to around 8%, up from 7.8%. Meaning, the Q4 CPI read could print between 7.75% and 8.25%. The RBA downgraded its GDP forecasts, only expecting 3% this year and 1½ per cent in 2023 and 2024. If the RBA makes any hint of a becoming even more dovish at their next meeting, it could perhaps prompt an outsized market reaction in the ASX200 and fuel a risk on rally. Imminently, in FX, the AUDUSD is on watch ahead of the Fed’s hike on Wednesday, and could succumb to further selling if the Fed hikes by 0.75%. Another pair under pressure is the AUDNZD.  AMD earnings supported by servers despite weak PC sales Advanced Micro Devices rose in the after-hour trading as it reported better than estimated Q3 earnings, although issuing guidance that missed analysts’ expectations. EPS came in $0.67 vs estimated $0.65, revenue $5.57B vs estimated $5.62B. Guidance suggested AMD is expecting strong growth in its server chip business in the coming quarters. Q3 results were in-line with a warning issued by AMD on October 6 which helped to reset expectations, as weak PC sales continued to underpin. Airbnb drops on disappointing guidance Airbnb reported its highest revenue and most profitable quarter but a muted Q4 outlook as consumer preferences are shifting back to cities which tend to have lower rates based on smaller sized spaces. Q3 revenue rose 29% to $2.88B, estimated $2.84B. Net profit rose 45.6% to $1.21B. But the company said it expected bookings to moderate after a bumper third quarter. Sony surges on profit beat Weak yen propped up revenues for Sony and also nudged up the fiscal year profit outlook, pushing shares higher in early trading. Q2 sales came in at 2.75tr yen, est. 2.67 tr yen while operating income was 344bn yen vs. 280.66bn yen expected. Operating profit beat was broad-based, except in games.   For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-2-nov-02112022

Summary:  The Powell Fed was probably hoping that it could fly under the radar at today’s FOMC meeting, giving itself the luxury of two more data cycles as inputs before providing fresh guidance and forecasts at the mid-December FOMC meeting. But no such luck, given the recent significant easing of financial conditions and yesterday’s very hot September jobs opening survey. FX Trading focus: Powell in the hot seat at tonight’s FOMC, needing to surprise hawkish The US September JOLTS jobs openings release yesterday was a shocker, as August data was revised up 250k and the September release was nearly a million more than expected at 10.72M. This jolted US yields and the US dollar back higher, keeping the greenback largely in the tactical neutral zone ahead of tonight’s FOMC meeting. It is the latest data point to suggest that the Fed will have a hard time pre-committing to any slowdown in the pace of its policy tightening after the 75-basis-point hike that is fully priced in for tonight. The December 14 FOMC meeting odds have not shifted much over the last couple of weeks, as investors still favor the idea of a downshift to a 50-basis-point hike at that meeting, followed by another 50 basis points of tightening early next year over the space of a couple of meetings. (An interesting psychological block for this market appears to be the 5.00% level for the Fed Funds rate – markets have been unwilling to project the Fed to hike above this level – which is about where we are now for the March-May FOMC meetings) As I outlined in yesterday’s update, if the Fed merely keeps quiet and endorses current expectations and punts on further guidance until December, we might see an extension of the melt-up in risk sentiment and see another wave of USD weakness. But yesterday’s JOLTS data point raises the odds that the Fed will want to push back against that outcome or at least against complacency on its potential policy path in general. To surprise hawkish today, Powell and company will have to make it very clear that the Fed is willing to continue tightening beyond current expectations. At the same time, that task will be difficult if they are reluctant to pre-commit to another large hike in December. One possible tactic to keep maximum forward potential for hawkishness would be for the Fed to indicate very high reactivity to further incoming data and openness to continuing with large hikes as long as necessary if the data supports doing so. It's hard to tell how the market would treat such a stance at tonight’s meeting if that is what the FOMC delivers, but in coming days and until the December 14 FOMC meeting, it would certainly mean extreme volatility on the next bits of Incoming data, starting with the ISM Services tomorrow and then especially the October jobs report this Friday. Then we’ll have the October JOLTS survey, the November jobs report, and the October and November CPI releases before that meeting. Chart: EURUSDEURUSD is perched between the important parity level to the upside and perhaps 0.9875-0.9850 support to the downside, an important level on the way up, awaiting today’s FOMC meeting. Downside risk for a test of the cycle lows below 0.9600 if the Fed manages to surprise hawkish and lift rate expectations, while we’ll have to close north of parity and see a continued improvement in risk sentiment and perhaps some weak US data through Friday to sustain a new upside leg. Bank of Japan minutes surprise. It’s been a while since we got a surprise from the BoJ, and normally we don’t look for them in the minutes, which are not released until after the following meeting. But last night’s minutes from the September BoJ meeting generated a few waves and JPY strength as they showed considerable signs of member discomfort with rising price pressures and even brought up the subject of an eventual policy shift, even if not suggesting one is imminent: one member said that “when the appropriate time comes, it’s important to communicate to markets an exit strategy”. This won’t sustain a JPY rally if US treasuries run back higher after the FOMC today and/or in the wake of the key US data through Friday. NZD strength getting stretched after the strong jobs report overnight extended the NZD rally against the Aussie and even keeping the currency near the top of the recent range versus the US dollar. Not sure how much more the little kiwi can get out of this run of strength here – a turn in broad sentiment could suddenly see vulnerability. The RBNZ is concerned about the impact on the policy tightening on the country’s financial system in its financial stability report released yesterday. I don’t see any meaningful ability for policy to diverge from here from Australia’s for example. Bloomberg put out an interesting article on the globally weather-stressed dairy industry. New Zealand is the world’s largest dairy exporter and combined, milk, beef, butter and cheese make up some 30% of New Zealand’s exports in physical goods. The article mentions climate-linked legislation possibly limiting future output – worth watching. Table: FX Board of G10 and CNH trend evolution and strength.CNH weakness still prominent, sterling’s relative strength fading, kiwi strength looking overdone and USD at maximum indecision here. Table: FX Board Trend Scoreboard for individual pairs.EURCHF making a bid at a reversal of the uptrend that was established more than four weeks ago if it drops through the 0.9850-0.9800 zone in coming days. Look at AUDUSD ready to possibly tilt lower again if the USD can get a leg-up post-FOMC. EURUSD is also close to flipping lower again after its uptrend attempt didn’t extend very far from its launching point, which was near the current rate. Upcoming Economic Calendar Highlights 1215 – US Oct. ADP Employment Change 1800 – US FOMC Meeting 1830 – US Fed Chair Powell Press Conference 2000 – New Zealand RBNZ Governor Orr before Parliamentary Committee 0145 – China Oct. Caixin Services PMI   Source: https://www.home.saxo/content/articles/forex/fx-update-pressure-mounts-on-fed-to-surprise-hawkish-02112022

NZD/USD is sharply higher today. In the European session, the New Zealand dollar is trading at 0.5883, up 0.71%. New Zealand employment data shines New Zealand posted a strong employment report for the third quarter, indicative of a robust labour market. Employment rose 1.3% QoQ, up from 0.0% in Q2 and above the consensus of 0.5%. The unemployment rate remained at 3.3%, just shy of the consensus of 3.2%. As wage inflation remained unchanged at 3.8% YoY, above the estimate of 3.4%. The labour market continues to suffer from staff shortages and capacity limits, which has contributed to spiralling inflation. This report will add to the pressure on the Reserve Bank of New  Zealand to continue to raise rates. The RBNZ has raised the cash rate to 3.50%, its highest since 2015. Still, the steep tightening has failed to curb inflation, and the central bank is likely to respond with a 75-basis point hike later this month, after five straight hikes of 50 basis points. Inflation in Q3 came in at 7.2%, and the RBNZ finds itself much further behind inflation than it had anticipated. The hot inflation report has raised expectations that the central bank will raise rates to a peak of  5.0% or even higher in early 2023. This leaves the RBNZ with little choice but to continue with oversize rate hikes, despite the spectre that further oversize rate hikes will tip the economy into a recession. The spotlight is on the Federal Reserve, which winds up its 2-day policy meeting later today. This would bring the benchmark rate to 4.0%. The question on the minds of investors is what happens next? The final meeting of the year is on December 14th and hopes that the Fed will downshift their tightening pace at that meeting have faded, as inflation has been stickier than the Fed expected. The markets will be listening closely to Fed Chair Powell’s comments today, hopeful for some insights into what the Fed has planned in the next few months. NZD/USD Technical There is resistance at 0.5906 and 0.5999 There is support at 0.5782 and 0.5689   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZ dollar jumps on solid jobs report - MarketPulseMarketPulse

NZD/USD is now seen navigating the 0.5740-0.5900 range in the next weeks, suggest Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group. Key Quotes 24-hour view: “NZD spiked briefly to 0.5942 in NY trade before plunging to close at 0.5819 (-0.35%). NZD traded on a weak note in early Asian trade and the bias today is for NZD to weaken. That said, the major support at 0.5740 is unlikely to come under threat. Resistance is at 0.5840, followed by 0.5870.” Next 1-3 weeks: “Our latest narrative was from last Thursday (27 Oct, spot at 0.5835) where NZD could rise but it has to close above 0.5880 before further sustained advance is likely. NZD did not close above 0.5880 and yesterday (02 Nov), it dropped to a low of 0.5815 before extending its decline in early Asian trade. Upward pressure has subsided and we expect NZD to trade between 0.5740 and 0.5900 for the time being.”

The New Zealand dollar is sharply lower today. In the European session, NZD/USD is trading at 0.5761, down 0.95%.   Fed raises rates 0.75%, says more to come   It was a roller-coaster day for the financial markets on Wednesday, courtesy of Federal Reserve Chair Jerome Powell. There were no surprised faces after the Fed raised rates by 75 basis points, as the move had been well-telegraphed by the Fed. Equity markets initially rose, but then took a tumble after Powell delivered a hawkish message in his post-meeting comments. Powell stated that there was no indication that inflation had peaked and that it was “premature” to talk about a pause in rate hikes.   At the same time, Powell signalled that the Fed would slow the pace of tightening in December, which is what investors wanted to hear. Inflation remains the Fed’s top priority, and the battle to curb inflation is far from over. Powell’s hawkish message to the markets sent the US dollar higher against all the major currencies, with risk currencies like the New Zealand dollar taking a tumble, as the kiwi has fallen to a 2-week low.   In New Zealand, the semi-annual financial stability report, released on Wednesday found that the country’s financial system remains resilient, but there were plenty of ‘buts’ that followed. The report noted that households and businesses were being hit hard by rising interest rates and it expected the sharp drop in house prices to continue. The report warned that the global economic outlook was uncertain and a downturn in any of New Zealand’s trading partners could lead to lower demand for exports, which would have a negative impact on the economy.   NZD/USD Technical   There is resistance at 0.5906 and 0.5999 There is support at 0.5782 and 0.5689       This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZD dives as Fed pledges more tightening - MarketPulseMarketPulse

AUDUSD longs at support at 6395/6385 worked on the strong bounce to 6463, just below the 6370 target. The pair is still trying to build a counter trend move. The problem with counter trend moves is that they are never smooth. The bears still think they have control & keep trying to push lower so we keep seeing deep 150 pip moves lower before a strong recovery. NZDUSD longs at first support at 5790/70 finally work as we bounce off the inverse head & shoulders neck line at 5790/70 & shot higher to my target of 5890/5910 for an quick 100 pips profit. However in this tough counter trend move, the gains were not sustained & the pair collapsed swiftly to 5823. EURUSD longs at 9880/70 & EURCAD shorts at 1.3500/1.3480 were 2 of the scalps that worked yesterday for a quick 50 pips profit in each pair. EURUSD struggling to push higher in the counter trend recovery. 2 steps forward & 1 huge step back - this has been the trend for 5 weeks. USDCAD scalping resistance at 1.3680/1.3700 & support at strong support at 1.3520/00 has been a great strategy for a week. Keep scalping while we wait for a breakout. EURCAD shorts at first resistance at 1.3490/1.3510 worked perfectly with a high for the day exactly here. A 50 pips profit offered so far. **Dollar pairs will obviously be influenced by today's Fed rate decision.** Today's Analysis. AUDUSD collapsed to retest support at 6395/6385 & made a low at 6375 so obviously this remains the important levels for today. A bounce again targets 6435/45 , perhaps as far as 6465/6470. Further gains test last week's high at 6510/20. Longs at 6395/6385 stop below 6360. A break lower targets 6330 & 6280/70. NZDUSD first support again at the head & shoulders neck line at 5790/70 of course. Longs need stops below 5750. Our longs target 5845/55 & 5890/5910. A break higher can reach 5980. EURUSD support at 9880/70 is key to direction again today. Longs worked perfectly yesterday targeting 9915/25 & reaching 9950. Above 9955 today signals further gains towards resistance at 9985/95. Longs at 9880/70 need stops below 9850 (a low for the day yesterday at 9851 so we are just holding the position). Further losses can target support at 9810/9790. USDCAD holding below 1.3600 risks a slide to 1.3570/60 & perhaps as far as strong support at 1.3520/00. Longs need stops below 1.3480. A break lower is a sell signal. Holding above 1.3630 can retest resistance at 1.3680/1.3700. Shorts need stops above 1.3720. A break higher is a buy signal. EURCAD shorts at 1.3500/1.3480 work on the slide to 1.3450 & we could target support at 1.3390/70. Longs need stops below 1.3350. Longs at support at 1.3390/70 can target 1.3450, perhaps as far as first resistance at 1.3490/1.3510. Shorts need stops above 1.3530.

NZDUSD regains positive traction on Friday and draws support from a combination of factors. A modest USD downtick and a positive risk tone offer some support to the risk-sensitive Kiwi. The Fed’s hawkish outlook should help limit the USD losses and cap the pair ahead of the NFP. The NZDUSD pair attracts fresh buying near the 0.5755 region on Friday and reverses the previous day's slide to over a one-week low. The pair maintains its bid tone through the early European session and is currently placed near the daily high, just above the 0.5700 round-figure mark. The US Dollar pauses the post-FOMC rally and for now, seems to have snapped a six-day winning streak, which, in turn, offers support to the NZDUSD pair. A generally positive tone around the equity markets is seen weighing on the safe-haven buck and benefiting the risk-sensitive Kiwi. Apart from this, the USD downtick could be attributed to some repositioning trade ahead of the closely-watched US monthly jobs report, due for release later during the early North American session. That said, elevated US Treasury bond yields, bolstered by a more hawkish stance adopted by the Federal Reserve, should limit any deeper USD pullback and cap gains for the NZDUSD pair. It is worth recalling that Fed Chair Jerome Powell downplayed expectations for a dovish pivot and said that it was premature to discuss a pause in the rate-hiking cycle. Powell added that the terminal rate will still be higher than anticipated and triggered a sharp rise in the US Treasury bond yields. In fact, the yield on the two-year US government bond, which is highly sensitive to interest rate hike expectations, touched a 15-year high on Thursday and inched closer to the 5% psychological mark. The benchmark 10-year US Treasury note, meanwhile, holds steady above the 4.0% threshold and favours the USD bulls. Heading into the key data risk, the fundamental backdrop might hold back traders from placing aggressive bets and cap the upside for the NZDUSD pair, for the time being.

Summary:  The FOMC meeting this week forced the market to adjust to the idea that the Fed could continue to take rates higher than had previously been priced. But clearly, to drive tightening expectations higher still, we’ll need to continue to see hotter than expected US data, with today’s US jobs report the next test on that. Elsewhere, sterling is in a world of hurt after BoE’s very dovish guidance. FX Trading focus: US incoming data focus after hawkish FOMC. BoE in dovish pushback against market hike expectations. The US dollar followed through stronger yesterday on the momentum off the back of the hawkish Powell presser Wednesday, but has come in for a chunky reversal overnight and today since a somewhat softer than expected ISM services survey yesterday (nudged lower to 54.4 vs. 55.3 expected and 56.7 in September, with the employment sub-index dipping back below 50 at 49.1 vs. 53.0 in September). Wouldn’t it be ironic if we also were to get a soft US jobs report today that takes US yields back to their starting point of the week, making Powell’s hawkish message so much noise, at least until the next incoming data point jerks the market the other way? Interestingly, the USD is selling off ahead of today’s US data releases even as short US yields are posting new highs for the cycle Specifically in today’s jobs report, in addition to any strong directional surprise in payrolls (multi-month grain of salt needed with this data series, as single releases require further corroborating evidence), we should keep both eyes on the average hourly earnings survey. Arguably, if we get the expected 0.3% month-to-month average hourly earnings print today after a couple of prior prints of a similar size, observers may begin to judge that the annualized rise in earnings is beginning to look far less threatening at sub-4.0%. The year-on-year is expected to drop to a 15-month low of 4.7% today. A significant upside surprise in earnings is perhaps could generate significant volatility. Chart: EURGBPWorth considering how the dovish Bank of England meeting yesterday (see more below) is weighing heavily on sterling, as it should, with the Bank of England reluctant to signal much tightening energy when it sees an incoming recession. Sterling is down sharply across the board, with EURGBP suddenly well backed up within the old range and now far away from the sub-0.8600 range support. The next area between the 0.8800 and pivot high of 0.8870 area looks key for whether sterling weakness is set to become a bit more unhinged, and the next key event-risk test is likely how the market greets an austere Autumn budget statement on November 17. Bank of England wrap. The BoE hiked by 75 bps to 3%, as most expected and as was mostly priced in, but Bailey and company strongly pushed back against expectations for the scale of future moves, saying that the terminal rate priced in currently by the markets would induce a two-year recession. There were also two dovish dissenters at the meeting, one calling for 50 bps rate hike and another for a mere 25 bps. New forecasts were also released, which gave a particularly grim outlook for the economy, looking for a GDP print of -0.5% QoQ in Q3 2022 vs -0.1% expected in September. The inflation forecast now shows a peak around 11% in Q4, which is marginally hotter than the prior meeting’s projection. Sterling was crushed lower, having already fallen heading into the meeting, and it speaks volumes that even though the BoE pushed back against the forward implied expectations for further tightening, which it said would trigger a 2-year UK recession, the market did not budge those expectations. In short: the market refuses to acknowledge what the BoE thinks it might do, probably figuring that the BoE will have no choice due to sterling weakness but to pursue the path to 4.50% or higher rates before mid-next year. I was surprised by the lack of discussion or journalist questioning in the press conference around the risk that currency weakness drives worse inflationary outcomes if the BoE fails to do as much as the market is pricing. Sterling remains in a heap of trouble. Table: FX Board of G10 and CNH trend evolution and strength.The USD needs to stick the move off the back of the FOMC meeting after the US jobs data today, otherwise we’ll suddenly be back to square one. The hottest movement in FX was clearly the sterling sell-off yesterday on a very clearly dovish Bank of England meeting. CNH is making waves on a lot of movement overnight and noise (unconfirmed) of an eventual opening up. Table: FX Board Trend Scoreboard for individual pairs.While the US dollar flipped to a positive trend in many places, we must still consider the risk that incoming data complicates the plot. GBP is already registering a negative trend in many new GBP pairs after yesterday’s BoE meeting. Interesting that the NOK failed to roll over to the downside in a couple of key pairs after the small hike from the Norges Bank yesterday. Upcoming Economic Calendar Highlights 1215 – UK Bank of England Chief Economist Huw Pill to speak 1230 – US Oct. Nonfarm Payrolls Change 1230 – US Oct. Unemployment Rate 1230 – US Oct. Average Hourly Earnings 1230 - Canada Oct. Unemployment Change/Rate 1400 – Canada Oct. Ivey PMI 1400 – US Fed’s Collins (Voter 2022) to speak Source: https://www.home.saxo/content/articles/forex/fx-update-us-incoming-data-sterling-pays-price-after-dovish-boe-04112022

NZDUSD opens with a modest weekly bearish gap amid the emergence of some USD buying. Elevated US bond yields and a weaker risk tone help revive demand for the safe-haven buck. Bulls might wait for a sustained move beyond the 0.5935-0.5940 area before placing fresh bets. The NZDUSD pair attracts some buying following a modest bearish gap opening to the 0.5855-0.5850 area on Monday, albeit struggles to capitalize on the move. Spot prices retreat a few pips from the daily top and remain on the defensive below the 0.5900 mark through the early European session amid a modest US Dollar strength. A combination of supporting factors assists the USD to regain some positive traction on the first day of a new week and recover a part of Friday's post-NFP slump. In fact, the mixed results from the closely-watched US monthly jobs report fueled speculations that the Federal Reserve could slow the pace of future rate hikes and weighed heavily on the greenback. That said, elevated US Treasury bond yields, along with a softer tone, helps limit any further losses for the safe-haven buck and act as a headwind for the NZDUSD pair. The market sentiment remains fragile amid concerns about headwinds stemming from China's commitment to maintaining its economically disruptive zero-COVID policy. This comes amid the protracted Russia-Ukraine war and adds to growing worries about a deeper global economic downturn. Even from a technical perspective, the emergence of fresh selling ahead of the mid-0.5900s warrants caution for bullish traders. Hence, it will be prudent to wait for strong follow-through buying before positioning for any meaningful upside for the NZDUSD pair. There isn't any major market-moving economic data due for release from the US, leaving the USD at the mercy of the US bond yields. Apart from this, traders will take cues from the broader market risk sentiment to grab short-term opportunities around the risk-sensitive Kiwi. That said, the mixed fundamental backdrop might force short-term traders to move to the sidelines ahead of the release of the latest US consumer inflation figures on Thursday.

The New Zealand dollar is steady today, after ending the week with huge gains. NZD/USD is trading at 0.5934 in the North American session. US dollar slides after NFP The US dollar was broadly lower on Friday, after the nonfarm payroll report sent mixed signals about the strength of the labor market. The October reading of 261,000 was stronger than the consensus of 200,000, but it marked the smallest gain since December 2020. The unemployment rate rose to 3.7%, up from 3.5%, while wage growth rose to 5.5% YoY, up from 5.2%. The latter release is likely to keep the Fed concerned about inflationary pressures. The mixed numbers left investors in a dovish mood and the US dollar paid the price. NZD/USD climbed a remarkable 2.7%, as investors gave a strong thumbs-up to risk currencies like the New Zealand dollar. The job data has led to the markets raising the likelihood of a 50 basis points hike in December – the CME’s Fed Watch has pegged a 50 bp increase at 56% and a 75 bp move at 34%. Still, with the Federal Reserve expected to raise rates to 5% or even higher next year, I would not be surprised to see the US dollar quickly recover from Friday’s tumble. Investors were looking for anything to send the equity markets higher, and the mixed NFP report was their excuse, even though US job creation was stronger than expected. New Zealand will release Inflation Expectations on Tuesday. The Reserve Bank of New Zealand will be watching carefully, as it continues its titanic battle with inflation. Last week’s employment numbers indicated that the labour market remains tight – unemployment is very low and wage growth is moving higher. This makes the RBNZ’s battle with inflation will continue and we can expect another oversized rate hike at the November 23rd meeting – perhaps as high as 75 bp. The risk of a wage-price spiral is a key concern for policy makers, and if the upcoming Inflation Expectations accelerates, it would be a worrisome signal that inflation is still on the upswing. NZD/USD Technical There is resistance at 0.5906 and 0.5999 There is support at 0.5782 and 0.5689 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. New Zealand dollar flies after US NFP - MarketPulseMarketPulse

NZDUSD pares recent gains as bulls step back from 1.5-month high, snaps two-day uptrend. RBNZ Inflation Expectations improved to 3.62% for two-year, 5.08% for one year. Sour sentiment, China’s covid woes exert downside pressure on prices. Lackluster moves expected ahead of US CPI, risk-aversion may help please bears. NZDUSD bulls take a breather at the multi-day high during a sluggish Tuesday morning in Europe. With this, the Kiwi pair remains mildly offered near 0.5930 after rising to the highest levels since September 20, snapping a two-day uptrend. In doing so, the quote fails to justify the strong points of the Reserve Bank of New Zealand’s (RBNZ) Inflation Expectations for the fourth quarter (Q4). That said, the RBNZ one-year inflation expectations rose from 4.86% to 5.08% QoQ whereas the more closely watched two-year counterpart increased to 3.62% compared to 36.07% marked in the third quarter (Q3). A lack of major data/events and recently firmer covid numbers from China dim the market’s previous optimism, which in turn allowed the US dollar to lick its wounds during an inactive session. China reported the biggest jump in the fresh daily coronavirus numbers since April, which in turn justifies the dragon nation’s previous defense of the zero-covid policy. Elsewhere, indecision over the US Federal Reserve’s (Fed) next move and the cautious mood ahead of the US Consumer Price Index (CPI) for October, as well as the US mid-term election, also underpin the US dollar’s corrective bounce. Amid these plays, the US Treasury yields are firmer and stock futures remain indecisive but the US Dollar Index (DXY) rebounds from a one-week low. Moving on, NZDUSD may witness further pullback but the bullish chart pattern and expectations of easy inflation might defend the pair buyers. Technical analysis A one-month-old ascending trend channel keeps NZDUSD buyers hopeful between 0.6000 and 0.6220.

2022 has been a frustrating year for FX forecasters, and the New Zealand Dollar in general. USD strength continues to dominate, but economists at ANZ do think the NZD will do better in 2023. USD domination will slowly subside “Looking ahead, while it is impossible to forecast when we might see geopolitical risks lessen, we do expect USD domination will slowly subside as the US economic cycle itself matures.” “With the RBNZ expected to hike by 75 bps at the next two meetings, and the Fed expected to slow the pace of hikes, the NZD has scope to regain some lost ground.” “New Zealand’s external imbalances are large. This is generally viewed by markets as more of a risk factor rather than as a reason to aggressively sell the NZD, but the fact that the deficit is set to narrow over 2023 as international tourism recovers (off a near-zero base) does reduce a negative in the equation for the NZD.” “One other string in the NZD’s bow is the gap between its current level and fair value, which we see at around 0.65. Our forecasts have this gap slowly closing over coming quarters, taking the NZD to fair value by the end of 2024.”

The New Zealand dollar has edged lower today. NZD/USD is trading at 0.5932, down 0.15%. NZ Inflation Expectations climb New Zealand continues to grapple with high inflation and this has led to a rise in inflation expectations as well. For Q4, inflation expectations stand at 3.62%, up from the Q3 reading of 3.07%. With no new inflation data prior to the November 23rd meeting, the inflation expectations release could play a key role in determining the Reserve Bank of New Zealand’s next rate move. Inflation ticked lower to 7.2% in Q3, down from 7.3% in the second quarter. Still, one inflation report does not reflect a trend, and it’s too early to say if inflation has peaked. What is clear is that inflation remains more than three times the RBNZ’s target of 2%, and a rise in inflation expectations is another signal that the fight against inflation is far from over. Governor Orr, who was just given another 5-year term at the helm of the central bank, has his hands full as he tries to guide the economy to a soft landing and avoid a recession. The RBNZ began its tightening cycle ahead of the other major central banks and has hiked rates to 3.50%. The aggressive rate policy hasn’t brought down inflation, but it has hurt consumers and businesses who are struggling with the double-whammy of red-hot inflation and rising interest rates. The financial markets are in caution mode today, as investors await the US midterm results.  The Republicans are expected to retake the House and possibly the Senate. Unless the Democrats pull a last-minute rabbit/donkey out of their hat, we are in for a deadlock in Washington, which will tie Biden’s hands for the next two years. With the US economy possibly headed for a recession, gridlock in Washington could unnerve investors and weigh on the equity markets, and the US dollar could be the big winner. NZD/USD Technical There is resistance at 0.6001 and 0.6095 There is support at 0.5871 and 0.5800   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZD dips as inflation expectations rise - MarketPulseMarketPulse

Anxiety ahead of the US inflation data has dragged the asset from the psychological resistance of 0.6000. Overall optimism in the market may provide support to the asset around the 20-EMA. The RSI (14) is still oscillating in the bullish range, which indicates that the upside momentum is still intact. The NZDUSD pair has turned sideways after failing to cross the immediate hurdle of 0.5960 in the Tokyo session. The risk profile has turned quiet as investors have shifted to the sidelines ahead of the US inflation data. The US dollar index (DXY) is displaying topsy-turvy moves around 109.70 and is expected to remain on the tenterhooks. Going forward, the outcome of the US mid-term elections and the release of the US inflation will provide a decisive action in the currency market. On a four-hour scale, the asset is auctioning in a Rising Channel pattern that indicates an upside structure. The upper portion of the chart pattern is placed from October 12 high at 0.5716 while the lower portion is plotted from October 13 low at 0.5512. The asset has witnessed selling pressure after attempting a break above the psychological resistance of 0.6000. And, the decline move is basically a mean-reversion move and is expected to find support around the 20-period Exponential Moving Average (EMA) at 0.5918. The 50-EMA at 0.5868 is still advancing, which adds to the upside filters. Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a bullish range of 60.00-80.00, which indicates that the upside momentum is active. A corrective move to near the 20-EMA at 0.5918 will present an entry opportunity for the smart money, which will drive the asset towards the psychological resistance of 0.6000, followed by August 29 low at 0.6100. On the contrary, a downside move below Monday’s low at 0.5863 will put the Greenback bulls in the driving seat and will drag the asset towards the round-level support of 0.5800. A slippage below the latter will open room for more downside towards Thursday’s low at 0.5741. NZDUSD hourly chart

NZDUSD fails to cheer the US dollar weakness during early Thursday as it stays pressured around the intraday low of 0.5865 heading into the European session. In doing so, the Kiwi pair takes clues from the options market, as well as downbeat signals from the Reserve Bank of New Zealand (RBNZ). That said, the one-month RR of the NZD/USD pair, the key options market gauge, braces for the biggest weekly loss in six while printing the -0.025 figure. It’s worth noting that the RR is the difference between the call options and the put options and hence indicates the market’s bias. It should be noted that the daily RR, however, snaps a two-day downtrend with a +0.065 figure and challenges the NZDUSD bears. On a different page, Reuters said, “The New Zealand central bank's dramatic easing in monetary policy was largely warranted over the COVID-19 pandemic, but with hindsight policy tightening should have occurred earlier in 2021, an internal report released by the bank on Thursday found.” Also read: NZDUSD Price Analysis: Bears in control with eyes on daily trendline

Risk appetite noticeably fell this Thursday morning. The S&P 500 already lost more than 2% the previous day, while stock markets in Asia-Pacific countries traded in the red zone. Europe is also likely to open lower, which can not be said to government bond yields as it showed somewhat higher stability. 10-year US Treasures stayed above 4%, confidently indicating an increase in the risk of stagflation. Part of the reason why risk appetite decreased is the preliminary results of the US elections, according to which the Republicans will receive a majority in the House of Representatives and thus be able to influence the government's budgetary policy. There is still no clarity on the Senate, as the state of Georgia will hold a second round, scheduled for December 6. The second factor is the increase in the number of Covid patients in China, which reduces the likelihood of lifting restrictions. Today, the focus will be on the US inflation report, which has a base rate forecast of +6.5%, slightly below September's 6.5%. It is very important because if inflation does not show at least some signs of slowing down, then Fed rate forecasts could rise to 6% for 2023, which will increase panic and push up demand for dollar. Conversely, a data release of 6.5% or lower could dampen anti-risk sentiment slightly and boost demand for commodity currencies. NZD/USD Inflationary momentum in New Zealand remains strong and there is no slowdown yet. But the labor market is very stable, thanks to the very large decrease in the number of workers dropping out of the labor force. Another record performance for the 3rd quarter is the growth in average hourly wages, which in the private sector grew by 8.6% y/y. It is expected that by the end of the year, this figure will exceed 9%, which leaves the RBNZ no choice but to raise rates higher. The latest RBNZ survey on inflation expectations showed that inflation is expected to reach 5.08% in 1 year versus 4.86% in September. Then, it will return to 3.62% in 2 years versus 3.07% earlier. Obviously, inflation expectations continue to rise even though the RBNZ is raising rates quite aggressively. The ANZ Bank predicts that the rate will be raised to 5% in February, then peak in the end of 2023, which looks more aggressive than the Fed's policy, and will contribute to the growth of the yield spread in favor of the kiwi. But if prices for dairy products continue to drop, NZD will halt growth. That, however, is quite unlikely as a peak in stocks of dairy products has been formed and a reduction in production is expected, which will help support prices. According to reports, NZD net short position decreased for the second week in a row. There is a bearish advantage of -0.22 billion, but the estimated price turned up, increasing the probability of a bullish correction. Kiwi broke through the resistance level of 0.5866. In case of a rebound, support will be found in 0.5810/20, while resistance will be in 0.5960 (23.6% retracement level of the fall since February 2021). AUD/USD The consumer sentiment index reportedly fell 6.9%, from 83.7 in October to 78.0 in November. Obviously, inflation in Australia continues to grow, reaching 7.3% in the 3rd quarter against 6.1% earlier. Forecasts suggest further inflation growth. This is why the Australian government is very careful in making changes to tax policy. Rate forecasts are also rising to a higher level, which leads to a drop in consumer spending. There is also a marked decrease in labor market confidence, as well as in the possibility of buying a home. In terms of positioning, the latest data says net short position in AUD decreased by 0.1 billion over the reporting week. The bearish advantage remains, with the estimated price being below the long-term average and is directed downwards. Although the trend is bearish, there will be attempts of upward correction. Support is at 0.6320/30, while resistance is at 0.6510/30. But trading will move into a side channel, the exit from which is more likely down. When trying to grow to 0.6510/30, traders must sell first in order to return the quote to 0.6320/30. However, there is no reason yet to expect a full-fledged bullish reversal.   Relevance up to 07:00 2022-11-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326725

NZD/USD: The chart shows the movement of #NZD/USD on the daily chart (D1). At the time of writing, quotes are near the resistance level of 0.611. There is a chance that it will correct towards 0.600 in the following days, as shown in the chart (solid blue line). But if the key resistance level of 0.611 is broken, the pair is likely to grow further to 0.6235. Good luck! Relevance up to 09:00 2022-11-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327031

The strong recovery in NZDUSD could see the 0.6160 level revisited in the near term, note UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang. Key Quotes 24-hour view: “Yesterday, we held the view that ‘the rally in NZD is likely to extend even though a clear break of 0.6160 is unlikely’. However, NZD traded sideways within a range of 0.6067/0.6120. Further sideways trading would not be surprising, likely between 0.6060 and 0.6120.” Next 1-3 weeks: “There is not much to add to our update from yesterday (14 Nov, spot at 0.6105). As highlighted, the price actions from late last week appear to be a clear upside breakout and further NZD strength would not be surprising. Overall, only a break of 0.6000 (no change in ‘strong support’ level from yesterday) would indicate that NZD is not ready to rise to 0.6160. Looking ahead, the next resistance is at 0.6200.”  

NZDUSD regains positive traction amid the emergence of fresh selling around the USD. A recovery in the equity markets weighs on the buck and benefits the risk-sensitive Kiwi. Geopolitical risks and China’s COVID-19 woes might cap any further gains for the major. The NZDUSD pair attracts fresh buying near the 0.6115 area on Wednesday and steadily climbs to a fresh daily high during the early European session. The pair is currently trading just above the mid-0.6100s, though remains well below its highest level since August 26 touched the previous day. The US Dollar struggles to capitalize on the overnight late rebound from a three-month low and comes under renewed selling pressure, which, in turn, offers some support to the NZDUSD pair. The initial findings, as reported by Associated Press (AP) citing unidentified US officials, suggest that the missile that hit Poland on Tuesday may have been fired by Ukraine at an incoming Russian missile. The headlines infuse some stability in the financial markets, which, in turn, undermines the safe-haven buck and benefits the risk-sensitive Kiwi. Apart from this, firming expectations for a less aggressive policy tightening by the Federal Reserve is seen as another factor weighing on the buck. In fact, the markets are now pricing in over a 90% chance of a 50 bps rate hike at the next FOMC policy meeting in December. The bets were reaffirmed by the softer-than-expected US Producer Price Index on Tuesday, which, along with a surprise drop in the US consumer inflation figures last week, point to easing price pressures. That said, a modest uptick in the US Treasury bond yields could limit the USD losses. Furthermore, recession fears - amid worries about headwinds stemming from the protracted Russia-Ukraine war and economically-disruptive COVID-19 lockdowns in China, might cap the optimism. This, in turn, warrants some caution before placing aggressive bullish bets around the NZDUSD pair and positioning for any further gains. Traders now look forward to the US monthly Retail Sales data for a fresh impetus later during the early North American session. Adding to this, geopolitical developments might produce short-term trading opportunities around the NZDUSD pair.

NZDUSD has picked bids from 0.6120 amid obscurity in the market sentiment. The DXY is displaying a volatile performance and has surrendered intraday gains. The 10-year US Treasury yields have eased to 3.71% despite hawkish commentary from Fed’s Daly. The NZDUSD pair has witnessed buying interest after dropping to near 0.6120 in the Asian session. The asset has picked bids as the US dollar index (DXY) has turned volatile after facing selling pressure around the critical hurdle of 106.60. Market mood is displaying mixed cues as DXY has witnessed offers despite mounting geopolitical tensions between North Korea and the US. It could be possible that market participants must be awaiting further development on North Korea-US noise for making informed decisions. The DXY has surrendered the majority of its intraday gains and is likely to remain on tenterhooks as US economic calendar has nothing much to offer this week. Meanwhile, S&P500 futures are displaying topsy-turvy moves amid ambiguity in the risk impulse. The returns generated by long-term US government bonds have trimmed to 3.71% after printing an intraday high of 3.73%. Higher interest rate guidance by San Francisco Federal Reserve (Fed) President Mary Daly has failed to strengthen US yields. Fed policymaker has considered a range of 4.75% - 5.25% as reasonable for the policy rate end-point. She further added that the central bank wants to see a slowdown in the economy to cool down the red-hot inflation. On the NZ front, accelerating Covid-19 infections have not impacted the kiwi dollar much. Gita Gopinath, the first Deputy Managing Director of the International Monetary Fund (IMF), at the Caixin Summit, cited that “Calibrating China's zero-COVID strategy to mitigate the country's economic impact will be critical to sustain and balance the recovery,” This might impact recovery in the antipodean ahead.

NZDUSD has picked bids from 0.6120 amid obscurity in the market sentiment. The DXY is displaying a volatile performance and has surrendered intraday gains. The 10-year US Treasury yields have eased to 3.71% despite hawkish commentary from Fed’s Daly. The NZDUSD pair has witnessed buying interest after dropping to near 0.6120 in the Asian session. The asset has picked bids as the US dollar index (DXY) has turned volatile after facing selling pressure around the critical hurdle of 106.60. Market mood is displaying mixed cues as DXY has witnessed offers despite mounting geopolitical tensions between North Korea and the US. It could be possible that market participants must be awaiting further development on North Korea-US noise for making informed decisions. The DXY has surrendered the majority of its intraday gains and is likely to remain on tenterhooks as US economic calendar has nothing much to offer this week. Meanwhile, S&P500 futures are displaying topsy-turvy moves amid ambiguity in the risk impulse. The returns generated by long-term US government bonds have trimmed to 3.71% after printing an intraday high of 3.73%. Higher interest rate guidance by San Francisco Federal Reserve (Fed) President Mary Daly has failed to strengthen US yields. Fed policymaker has considered a range of 4.75% - 5.25% as reasonable for the policy rate end-point. She further added that the central bank wants to see a slowdown in the economy to cool down the red-hot inflation. On the NZ front, accelerating Covid-19 infections have not impacted the kiwi dollar much. Gita Gopinath, the first Deputy Managing Director of the International Monetary Fund (IMF), at the Caixin Summit, cited that “Calibrating China's zero-COVID strategy to mitigate the country's economic impact will be critical to sustain and balance the recovery,” This might impact recovery in the antipodean ahead.

We expect the Reserve Bank of New Zealand to hike by 50bp next week and signal a peak rate around 5.0%. The ongoing downturn in the housing market and worsening external conditions argue against a larger, 75bp move. We are not fully convinced the RBNZ will ultimately deliver all its projected hikes, but a dovish pivot is unlikely on the cards at this stage   Source: Shutterstock More tightening required As markets attempt to guess the timing of a dovish pivot by the Fed, another hawkish standout among developed central banks, the Reserve Bank of New Zealand, will announce monetary policy next week. At the October meeting, the RBNZ hiked rates by 50bp to 3.50%, and claimed that “monetary conditions needed to continue to tighten” until the Monetary Policy Committee is “confident there is sufficient restraint on spending to bring inflation back within its 1-3% per annum target range”.  In our view, another 50bp increase looks more likely Since the October meeting, domestic data for the third quarter have been released, and unmistakably argued in favour of additional tightening. Inflation (7.2% year-on-year) proved much more resilient than forecasted, unemployment remained low (3.3%) and wage growth accelerated (2.6% quarter-on-quarter). This has led markets to consider a more aggressive 75bp hike in November as an option: currently, the OIS curve embeds 63bp of tightening.  In our view, another 50bp increase looks more likely, especially when considering the ongoing correction in the housing market (more details below) and a challenging external environment: dairy prices, global demand, the Chinese economic outlook have all deteriorated lately.  Forward-looking message will be crucial A 50bp hike may be received as a slightly dovish surprise by markets, but we believe that a greater focus will be placed on the forward-looking policy message, in particular: a) any hints in the rate projections that we are close to the peak in rates; and b) other economic projections such as on inflation and house prices.  On point a): we expect a reiteration that monetary conditions need to be tightened further to bring down inflation. There should be a certain degree of acknowledgement that global and domestic conditions have started to deteriorate, but we doubt there is appetite within the MPC to deliver a dovish signal before having seen fourth quarter inflation and employment data.   RBNZ current rate projections are unrealistic Source: RBNZ   The trade-off the RBNZ is facing is not uncommon in the central bank world: signalling much more tightening to cap inflation expectations against delivering a more moderate and realistic rate path. At this stage, we feel the RBNZ may want to risk sacrificing a bit of credibility further down the road (should they underdeliver on hikes) for the sake of fighting inflation. If anything, the incentive to signal less tightening could be to keep mortgage rates capped, but they have not signalled excessive concerns on the housing market for now.   Our estimate is that the rate projections will largely align with market expectations for the RBNZ and the Fed, so showing a peak rate at around 5.00% (90bp higher than the 4.10% shown in the August forecasts). There is also a higher probability some rate cuts (possibly from late 2023) will be introduced in the projections.     Whether the RBNZ will effectively bring rates to 5.0%+ is another question. We are not fully convinced, as an expected acceleration in the house price contraction and further worsening of external conditions in the months ahead may force a dovish turn in early 2023 (next meetings are in February and April).  Housing market troubles to continue New Zealand’s house price index shows a -4.5% quarterly decline for price in October. The magnitude of this market downturn has now exceeded the worst quarter during the Global Financial Crisis period (-4.4% in August 2008). This is contributed by the rapid rise in mortgage rates, and the more stringent 40% deposit requirement.   We expect further deterioration to the housing outlook as lending activity continues to fall In RBNZ’s August statement, their projection shows a steeper and quicker decline of 15% from December 2021 to the trough, which is worse than the previous forecast in May. We expect further deterioration to the housing outlook as lending activity continues to fall and more borrowers face higher rates when re-mortgaging.   New Mortgage lending by borrower type (YoY%) Source: RBNZ   The supply side story is a bit better. Residential construction had remained strong and have finally past its peak. The decline in new dwelling consent is led by rising construction costs and limited capacity from a filled pipeline. However, due to supportive schemes like the KiwiBuild caps, this slowdown is much shallower than the one during and after the GFC.    Ultimately, current projections for the housing market are based upon the assumption that rate is peaking at 4.10% in April 2023. This would imply that the RBNZ only has 60bp worth of hikes to deliver in its tightening cycle – which looks quite unrealistic. If indeed the new projections show a peak rate around 5.0%+, then we suspect they will also need to display a steeper/longer downturn in the housing market. The speed of the house price correction will be crucial both for the pace of further hikes and for the timing/pace of rate cuts next year.   Market impact: NZD still mostly driven by external factors We don’t expect the impact on NZD to prove long-lived Given that markets are pricing in approximately a 50% probability of a 75bp hike, a 50bp may come as a dovish surprise. However, if this is accompanied by a hawkish rate path projection – i.e. peak rate around 5.0% – the overall message should remain quite hawkish. So we think the Kiwi dollar could rise after the announcement, even though we don’t expect the impact to prove long-lived, as external factors should continue to prevail.     We have recently revised our NZD/USD forecast profile (more details in our 2023 FX Outlook), and see the pair capped in 4Q22 and 1Q23 (we target 0.60), before a gradual rebound throughout 2023 (0.64 in 4Q23). Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

NZDUSD briefly edged above 0.62 this week. In the view of economists at ANZ Bank, the Kiwi has already seen the lows. USD’s safe haven premium to unwind  “While we are a touch cautious that US interest rates have gotten ahead of themselves, it is not just market expectations that the US policy cycle may be nearing a turn that is weighing on the USD.”  “We have also upgraded our China growth outlook (which should be good for commodities), and expect some of the USD’s safe haven premium to unwind following the Biden-Xi meeting in Bali, and as Europe copes with energy issues.” “That all makes us more comfortable believing that we have likely seen the lows in the NZD.”  

US Wall Street’s shortened trading week will be jam-packed with the FOMC minutes, more Fed speak, the flash PMIs and the final look at the University of Michigan’s inflation expectations.   One of the key events of the trading week will be the Fed’s minutes from the November policy meeting.  Financial markets will want to know if the Fed still believes that the cost of taking too little action to bring down inflation likely outweighed the cost of taking too much action. The Fed is expected to downshift to a half-point rate-hiking pace in December, but that rate-hiking cycle could last longer if pricing pressures become more entrenched.   US stock and bond markets will be closed Thursday for Thanksgiving Day and will close early on Friday.  Traders will pay close attention to Black Friday shopping data, which will give the latest pulse on the health of the US consumer.   EU  The highlight next week may well be the monetary policy accounts, although, with a steady stream of central bank commentary since the last meeting and a raft of economic data, it’s hard to say just how impactful they’ll ultimately be. The flash PMIs may tell a more interesting story of an economy heading for recession, while appearances from various policymakers – including President Christine Lagarde on Sunday – could fill in any gaps that haven’t already been filled. UK  It’s hard to get too excited about next week’s PMI data and central bank speak following the assessment from the OBR on the economic outlook, taking into consideration the latest fiscal squeeze. The UK is heading for its largest squeeze on living standards in six decades – a 7.1% decline – as interest rates continue to increase, taxes rise and the cost-of-living crisis intensifies.  The only question that remains is how soon the BoE can pause its tightening among all of these other pressures. It alluded to the fact that markets are pricing in too much at the last meeting but at this moment, another 150 basis points are still priced in. Russia Another quiet week on the economic data side, with PPI numbers the only notable releases. The focus remains on its invasion of Ukraine and how it handles recent losses in Kherson. South Africa Next week is action-packed, with inflation data being released on Wednesday ahead of the latest SARB rate decision a day later. While the headline CPI is expected to ease slightly to 7.4%, from 7.5%, core is seen rising from 4.7% to 4.9%, meaning both remain far too high. The SARB inflation target is 3-6%.  That is expected to push the SARB to hike interest rates again next week by 75 basis points, taking the repo rate to 7%.  Turkey The CBRT is expected to cut interest rates by another 150 basis points next week despite soaring inflation and a desperately weak currency. The latter has been managed with capital controls over the last couple of years and the new reserve-management system appears to be stabilizing it at record lows despite continued easing. The hope for President Erdogan is this can be carefully managed into next year’s election to at least give the impression of stability amid a potential deceleration in official inflation.  Switzerland No significant economic data or releases next week. The central bank continues to drive home the message that FX intervention could occur on either side. An inter-meeting rate hike can also not be ruled out. China The focus stays on China’s Covid situation. China’s Covid cases are near record highs and that is threatening to delay any looser rules. Expectations are now for China to reopen sometime after March. Investors widely expect Chinese commercial banks to keep both the 1-year and 5-year Loan Prime Rate (LPR) unchanged at 3.65% and 4.30% respectively. The PBOC might be delaying rate cuts until next quarter as they are concerned about yuan weakness.   India It is expected to be a quiet week for India.   Australia & New Zealand This week is mostly about New Zealand as the RBNZ is expected to deliver its sixth straight half-point rate hike. Hot inflation and wage data are expected to prevent the central bank from downshifting to a slower pace of tightening. Investors hoping for the bank to pause tightening in February might be surprised if the policymakers are worried that inflation isn’t falling quickly enough.    The lone release for Australia will be the preliminary PMI readings.  Last month the service sector fell into contraction territory while manufacturing activity continues to soften.   Japan A busy week filled with Japanese data, including preliminary PMI data for the services and manufacturing sectors in November and core CPI data for the Tokyo region in November. Inflation in Japan has hit a four-decade high and that is complicating what the BOJ wants to do.  Some economists are expecting Tokyo’s core inflation to slow for the first time since January but that is hardly the overall consensus.   Singapore The October inflation report is expected to show pricing pressures eased from 7.5% to 7.0%.  The final Q3 Q/Q GDP reading is expected to be revised a tick lower to 1.4%. Economic Calendar Saturday, Nov. 19 Economic Events The APEC Economic Leaders’ Meeting concludes Fed’s Bostic speaks at the Southern Economic Association annual meeting in Florida Sunday, Nov. 20 Events World Cup begins with Qatar hosting Ecuador ECBs Lagarde participates in formal dinner of European Roundtable for Industry Monday, Nov. 21 Economic Data/Events US Chicago Fed national activity index China loan prime rates Germany producer prices New Zealand credit card spending Sweden home prices, industry capacity utilization Taiwan export orders, current account balance Thailand GDP The Bank of Japan announces the outright purchase amount of Japanese government securities Ukraine President Zelenskiy speaks at NATO Parliamentary Assembly’s annual session ECB’s Holzmann and Simkus speak at the Conference on European Economic Integration hosted by Austria’s central bank Bank of Portugal Governor Centeno speaks at the CNN Portugal Summit Bundesbank President Nagel speaks at an evening event of the ICFW Frankfurt business journalists’ club Tuesday, Nov. 22 Economic Data/Events US Richmond Fed manufacturing index Canada retail sales Euro area consumer confidence Mexico retail sales, Banamex survey of economists New Zealand trade South Africa leading indicator Turkey consumer confidence South African President Cyril Ramaphosa is on a state visit to the UK The OECD releases its latest Economic Outlook German Chancellor Scholz speaks at the SZ-Wirtschaftsgipfel conference in Berlin ECB’s Holzmann speaks at the presentation of the Austrian National Bank’s financial stability report Fed’s Mester gives speech on wages and inflation Fed’s Bullard participates in a policy panel at the Central Bank of Chile’s annual conference RBA’s Lowe speaks at the annual CEDA dinner Wednesday, Nov. 23 Economic Data/Events FOMC minutes of November meeting US MBA mortgage applications, durable goods, initial jobless claims, preliminary PMIs, University of Michigan sentiment, new home sales European Flash PMIs: France, Germany, UK New Zealand central bank (RBNZ) rate decision: Expected to raise rates by 75bps to 4.25% Australia PMIs Mexico international reserves Russia industrial production, monthly PPI, weekly CPI Singapore CPI, GDP South Africa CPI Thailand trade balance EIA crude oil inventory report German Chancellor Olaf Scholz addresses the Bundestag on the country’s 2023 budget ECB’s de Guindos speaks at the Encuentro del Sector Financiero in Madrid Thursday, Nov. 24 Economic Data/Events US stocks and bond markets closed for Thanksgiving holiday Canada small business optimism France business, manufacturing confidence Germany IFO business climate Japan PMIs, department store sales, leading index, machine tool orders Russia gold and foreign-exchange reserves Sweden central bank (Riksbank) rate decision: Expected to raise rates by 75bps to 2.50% Turkey central bank (CBRT) rate decision: Expected to cut rates by 150bp to 9.00% South Africa central bank (SARB) rate decision: Expected to raise rates by 75bps to 7.00% Turkey real sector confidence South Africa PPI Mexico publishes monetary policy minutes ECB publishes accounts of its October policy meeting EU energy ministers hold an emergency meeting in Brussels ECB’s Schnabel speaks at the Bank of England Watchers’ Conference Friday, Nov. 25 Economic Data/Events US stock and bond markets close early Retailers hope for a strong Black Friday performance France Consumer confidence Spain PPI Sweden PPI Germany GDP Japan Tokyo CPI, PPI services Mexico GDP, current account balance New Zealand consumer confidence index, retail sales ex-inflation Singapore industrial production Thailand foreign reserves, forward contracts Sovereign Rating Updates Switzerland (Moody’s) Turkey (Moody’s) Poland (DBRS) This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Week Ahead - Central banks remain hawkish - MarketPulseMarketPulse

After an 18-month bull trend in the dollar, the FX outlook has become less clear. Further position adjustment could prompt a little more short-term dollar weakness, but we do not believe the conditions are in place for a major dollar bear trend just yet. Instead, we expect FX markets in 2023 to be characterised by less trend and more volatility. Source: Shutterstock G10: Less trend, more volatility The final quarter of 2022 has seen a breakdown in the otherwise orderly dollar bull trend – a trend which had been worth 5% per quarter over the first nine months of the year. That dollar rally had largely been driven by a Federal Reserve wanting to take policy into restrictive territory – a trend only exacerbated by the war in Ukraine. For all the current discussions about peak dollar and peak macro pessimism, we think it is still worth examining whether the conditions will be in place to deliver an orderly dollar bear trend in 2023. We think not and here are three reasons why: Driving the dollar bull trend since summer 2021 has been a Fed at first abandoning Average Inflation Targeting and then trying to get ahead of the inflation surge. A call on a benign dollar decline in 2023 requires the Fed to be taking a back seat. That seems unlikely. The stark message from both the Fed’s Jackson Hole symposium and the IMF autumn meetings was that central banks should avoid relaxing too early in their inflation battle – a move which would deliver the pain of recession without any of the sustained gains on inflation. We suspect it will be too early for the Fed to sound relaxed at its 14 December meeting and March 2023 may be the first opportunity for a decisive turn in Fed rhetoric. While a softer Fed profile may be a necessary condition for a turn in the dollar, a sufficient condition requires a global economic environment attractive enough to draw funds out of the dollar. 2023 global growth forecasts are still being cut – dragged lower especially by recession in Europe. ING forecasts merchandise world trade growth below 2% in 2023 – not a particularly attractive story for the trade-sensitive currencies in Europe and emerging markets. A liquidity premium will be required of non-dollar currencies. 2023 will be a year when central banks are initially still hiking into a recession and shrinking balance sheets. The Fed will reduce its balance sheet by a further $1.1tn in 2023 and the European Central Bank will be looking at quantitative tightening, too. Lower excess reserves will tighten liquidity conditions still further and raise FX volatility levels. Again, the bar not to invest in dollar deposits remains high – especially when those dollar deposits start to pay 5% and the dollar retains its crown as the most liquid currency on the planet. What do these trends mean for G10 FX markets? This probably means that the dollar can bounce around near the highs rather than embark on a clean bear trend in 2023. If the dollar is to turn substantially lower, we would favour the defensive currencies such as the Japanese yen and Swiss franc outperforming. Here, the positive correlation between bonds and equity markets may well break down via the bond market rallying on the back of a US recession and easier Fed policy. ING forecasts US 10-year Treasury yields ending 2023 at 2.75% - USD/JPY could be trading at 130 under that scenario.  Recession in Europe means that EUR/USD could be trading in a 0.95-1.05 range for most of the year, where fears of another energy crisis in the winter of 2023 and uncertainty in Ukraine will hold the euro back. Sterling should also stay fragile as the new government attempts to restore fiscal credibility with Austerity 2.0. We cannot see sterling being rewarded much more on austerity and suspect that GBP/USD struggles to hold gains over 1.20.  Elsewhere in Europe, some differentiation could emerge between the Scandinavian currencies. The Swedish krona may struggle to enter a sustained uptrend next year given its elevated exposure to the eurozone’s growth story, while the Norwegian krone could benefit from its attractive commodity exposure. However, NOK is an illiquid and more volatile currency, and would therefore face a bigger downside in a risk-off scenario. As shown in the chart below, commodity currencies look undervalued versus the dollar on a fundamental basis. However, a stabilisation in risk sentiment is a necessary condition to close the misvaluation gap. For the Australian and New Zealand dollars, an improvement in China’s medium-term outlook is also essential, so the Canadian dollar may emerge as a more attractive pro-cyclical bet given low exposure to the economic woes of Europe and China. Another factor to consider is the depth of the forthcoming house price contraction. We think central banks will increasingly take this into consideration and will try to avert an uncontrolled fall in the housing sector. However, this is potentially a very sizeable downside risk, especially for the currencies of commodity-exporting countries, which generally display the most overvalued property markets in the G10. To conclude, we think FX trends will become less clear in 2023 and volatility will continue to rise. FX option volatility may seem expensive relative to historical levels, but not at all when compared to the volatility FX pairs are actually delivering. We suspect risk management through FX options may become even more popular in 2023.   Valuation, volatility and liquidity in G10 Source: ING, Refinitiv EUR/USD: Dollar bromance will take some breaking   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/USD 1.035 Bearish 0.98 0.95 0.98 1.00 1.00 Bullish leap of faith is too dangerous: We are bearish on EUR/USD into the end of the first quarter of 2023. Key factors which have driven EUR/USD lower this year will remain largely in place. The softish US October CPI print may give the Fed some pause for thought, but should not be enough to derail it from some further tightening – taking the policy rate close to 5.00% in the first quarter of 2023. Another key factor for EUR/USD this year has been energy. Here, our team sees prices for both natural gas and oil rising from current levels through 2023. A difficult 2023 European winter for energy may well restrain the EUR/USD recovery later in the year, continuing to depress the eurozone’s traditionally large current account surplus.   Necessary but not sufficient: Tighter Fed policy has been at the forefront of this year’s dollar rally and a shift in the Fed tone (more likely in March 2023 than December 2022) will be necessary to see the short end of the US yield curve soften appreciably and the dollar weaken. But the sufficient condition for a EUR/USD turnaround is the state of affairs amongst trading partners. Are they attractive enough to draw funds away from USD cash deposits potentially paying 5%? That is a high bar and why we would favour the EUR/USD 2023 recovery being very modest, rather than the ‘V’ shape some are talking about. ECB will blink first: The case for a central bank pivot is stronger for the ECB than the Fed. The German economy looks set to contract 1.5% next year and at its 15 December meeting, the ECB may well use its 2025 forecast round to show inflation back on target. We see the ECB tightening cycle stalling at 2.25% in February versus the near 3% currently priced by the market for 2023. This all assumes a seamless ECB introduction of quantitative tightening and one that does not upset peripheral bond markets. Add in global merchandise trade barely growing above 1% next year (recall how the 2017-19 trade wars weighed on the euro) plus the risk of tighter liquidity spilling into financial stability – all suggest the market’s bromance with the dollar will continue for a while yet.  USD/JPY: 1Q23 will be a crucial quarter   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/JPY 140.00 Bearish 145.00 145.00 140.00 135.00 130.00 Clash of the titans: The stark divergence in monetary policy between the Fed and the Bank of Japan has been the primary driver of this year’s 15%+ rally in USD/JPY. In 2023, investors may question whether the BoJ is ready to tighten. The default view is that the perma-dovish BoJ Governor, Haruhiko Kuroda, will not be moved. However, the end of Governor Kuroda’s term on 8 April 2023 will no doubt lead to frenzied speculation on his replacement and whether a less dovish candidate emerges. Interest rate markets are starting to price a change – e.g. the BoJ’s 10-year target sovereign yield of 0.25% is priced at 0.50% in six months’ time. March 2023 will be especially volatile: The first quarter of 2023 will also see huge focus on the Japanese wage round, where a rise in wages is a prerequisite for the BoJ to tighten policy. Japanese politicians have been encouraging business leaders to raise wages, while at the same time, the government has been quite aggressive with fiscal stimulus to offset the cost-of-living shock. This period will also see the Fed release its dot plots (22 March), which may be the first real chance for the Fed to acknowledge a turn in the inflation profile. As such, this period (March/April) could see a big reversal lower in USD/JPY. FX Intervention slows the move: Most agree that USD/JPY is higher for good reasons (including the energy crisis) and that Japanese FX intervention can only slow, not reverse the move. The Japanese have already spent around $70bn in FX intervention between the 146 and 151 region in USD/JPY and will likely be called into further action based on our view of a stronger dollar over coming months. FX reserves are not limitless, of course, but Japan’s large stockpile of $1.1tn means that this campaign can continue for several more months. The purpose here is to buy time before the Fed cycle turns. Unless we end up with 6%+ policy rates in the US next year, we would expect USD/JPY to be ending 2023 nearer 130. GBP/USD: Running repairs   Spot Year ahead bias4Q221Q232Q233Q234Q23 GBP/USD 1.19 Mildly Bearish 1.10 1.07 1.11 1.14 1.14 Fiscal rescue plan: After September’s government-inflicted flash crash, GBP/USD is now recovering on the expectation of more credible UK fiscal plans and the softer dollar. As above, we doubt 2023 will prove the year of a benign dollar decline. And the risk is that the Fed keeps rates at elevated levels for longer. Given sterling’s large current account deficit and its transition to high beta on the external environment, we think it is too early to be expecting a sustained recovery here. Instead, we favour a return to the 1.10 area into year-end as the government introduces Austerity 2.0 and the Bank of England cycle is repriced lower. Tighter fiscal/looser monetary mix: At its meeting in early November, the BoE pushed back against the market pricing of the rate cycle – arguing that hikes close to 5% would see the UK economy contract 5%. Our call is that the BoE terminal rate will be closer to the 3.75% area than the 4.50% that the market prices today. As the BoE assesses the degree of tightening needed to curtail inflation, the government is discussing ways to fill around a £60bn hole in the budget. The plan will be revealed on 17 November, probably in a roughly 50:50 split between tax hikes and real terms spending cuts. We look for the UK economy to contract every quarter in 2023 – making it a very difficult environment for sterling. Sterling suffers from liquidity outages: This year’s BIS triennial FX survey saw sterling retain its position as the fourth most traded currency pair. Despite this, sterling does occasionally suffer from flash crashes. We think liquidity will be at a premium in 2023 and that a Fed taking real rates even higher as economies head into recession is a dangerous combination for sterling – where financial services make up a large section of the economy. GBP/USD realised volatility is now back to levels seen during Brexit and our market call for 2023 is that these types of levels will become more, not less, common. EUR/JPY: A turn in the cycle   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/JPY 144.50 Bearish 142.00 138.00 137.00 135.00 130.00 Downside risks into 1Q23: EUR/JPY has defied typical relationships with risk assets by gently rallying all year even as both bond and equity benchmarks sold off 20%. Driving that JPY underperformance has probably been BoJ policy and USD/JPY’s strong relationship with US 10-year yields. Both the eurozone and Japan have been hit by the energy shock, where external surpluses have quickly dwindled. As above, we tend to think there are downside risks to EUR/JPY in the first quarter of 2023 as speculation mounts over BoJ Kuroda's successor as well as the ECB potentially calling time on their tightening cycle at the February meeting. US10yr can drag EUR/JPY to 130 in 2H23: A large part of the JPY underperformance during 2022 has been driven by developments in the US bond market. USD/JPY consistently shows the most positive correlation to US 10-year Treasury yields of any of the G10 FX pairs – and far higher than EUR/USD. Consistent with ING’s view on the Fed cutting rates in the third quarter of 2023, our debt strategy team sees US 10-year yields starting to edge lower in the second quarter of 2023, and then falling 100bp in the second half of 2023. In theory, this should heavily pressure EUR/JPY into the end of the year. Financial stability risks increase: Lower growth and tighter liquidity conditions – at least through the early part of 2023 – increase the prospect of financial stability risks. Recall the Fed will be shrinking its balance sheet by $1.1tn in 2023 even as liquidity and bid-offer spreads continue to create difficult market conditions. The yen lost its shine as a safe-haven currency in 2022, but we suspect relative to the euro, some of that shine can be regained in a softer US rate environment. The EUR/JPY cycle should also turn if the ECB calls time on its tightening cycle at the 2 February meeting. EUR/GBP: Listless in London   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/GBP 0.87 Neutral 0.89 0.89 0.88 0.88 0.88 In the same macro boat: Both the eurozone and UK economies have been hit hard by the war in Ukraine and the surge in energy prices. Both saw sharp terms of trade declines into August and then a sharp reversal as natural gas prices dipped into the warm winter. There is not a substantial amount of difference between our German and UK quarterly growth profiles for 2023 – both contracting every quarter of the year. Perhaps one could argue that the UK is more exposed to higher mortgage rates given the shorter duration of fixed-rate mortgages in the UK. This could all make for a trendless EUR/GBP environment. Energy price guarantees could differentiate: One important determinant for UK growth in 2023 will be how the new government handles the Energy Price Guarantee. Former UK Prime Minister, Liz Truss, offered a two-year programme – subsequently cut back to six months after the UK fiscal crisis. How the UK consumer copes with having to pay market prices for energy will be key to the UK story in 2023 as well as how the EU as a whole copes with similar challenges. Currently, it seems that the ECB is concerned that the fiscal programmes in Europe are too generous and not particularly targeted – adding to the inflation challenge.    Political wild cards: To pick out a few political wild cards, the first is a re-run of the Scottish independence referendum. The Scottish National Party (SNP) has picked 19 October 2023 as the date – although such an exercise would likely have to be approved by the UK parliament. Currently, the SNP is pursuing an action through the Supreme Court to see whether London can indeed still veto the referendum. In Europe, the focus will probably be on the fiscal path taken by the new right-wing Meloni government and also the reform of the Stability and Growth Pact. Budgets submitted in late 2023 could become an issue were the rules to be tightened again.   EUR/CHF: Swiss National Bank to guide it lower   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/CHF 0.98 Bearish 0.95 0.93 0.90 0.90 0.92 Does the SNB want a stronger Swiss franc?: The Swiss National Bank this year said it made a conscious decision to allow nominal Swiss franc appreciation in light of the inflation environment. The three-month policy rate has been raised 125bp to 0.50% and the SNB says it wants to keep the real exchange rate stable. With inflation running at 3% in Switzerland versus 10% in its largest trading partner, the eurozone, the SNB in theory should be happy with something like 5-7% per annum nominal appreciation in the Swiss franc. That certainly was the story into the end of September but does not quite explain the Swiss franc's weakness over the last six weeks. Two-sided intervention: When hiking rates earlier this year the SNB also said it would be engaging in two-sided FX intervention. Ever since the start of the financial crisis in 2008, the SNB has been more familiar as a seller of the Swiss franc – including its 1.20 floor in 2011-2015. Now its strategy is changing and we read that as an objective to potentially manage the Swiss franc stronger in line with its ambitions to tighten monetary conditions. Earlier this year, we estimated that the SNB could possibly drive EUR/CHF to the 0.90 area in summer 2023 based on expected inflation differentials and the need for a stable real exchange rate. The risk environment should favour the franc: Central banks are communicating that they need to tighten rates into recession and remove the excess liquidity poured out during a series of monetary bailouts. Tighter monetary and financial conditions typically spell stormy waters for risk assets. With its still sizable current account surplus (worth 8% of GDP in the second quarter of 2022) the Swiss franc should perform well during this stage of the global economic cycle. Closer to home, the European economic cycle and the ECB discussing quantitative tightening into early 2023 will prove a challenge to peripheral eurozone debt markets and likely reinforce the franc as a eurozone hedge. EUR/NOK: Not for the faint of heart   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/NOK 10.33 Bearish 10.30 10.15 9.95 9.70 9.60 Risk sentiment remains key: The krone is not a currency for the faint of heart. It is the least liquid currency in the G10 space, making it considerably exposed to negative shifts in global risk sentiment and equity market turmoil. It is, at this stage, way too early to call for a turn in equities, and a hawkish Fed into the new year may actually mean more pain for risk assets, at least in the near term. A recovery in global sentiment should offer support to NOK in the second half of next year, but restoring market confidence in a very high-beta currency is no easy feat. Norges Bank policy: The krone’s underperformance in 2022 was exacerbated by Norges Bank effectively sterilising oil and gas profits via a large increase in daily NOK sales. In November, FX daily sales have been scaled back from NOK4.3bn to NOK3.7bn, and we think there could be some interest by NB to further ease the pressure on the currency via smaller FX sales. With recent dovish hints suggesting that the NB hiking cycle may peak at 3.0% (with most of the country on variable mortgage rates, many more rate hikes could be difficult to tolerate), allowing a stronger currency to do some inflation-fighting sounds reasonable.  Energy prices: If indeed markets enjoy a calmer environment in 2023 and NB favours a stronger currency, then NOK is left with considerable room to benefit from a still strong energy market picture for Norway. There is probably an optimal range for oil and – above all – gas prices to trade at elevated levels but not such high levels that would significantly hit risk sentiment. For TTF, this could be somewhere around 150-200 €/MWh. This a plausible forecast for next year, but the margin for error can be very large. We see EUR/NOK at 10.50 in the fourth quarter of 2023, but NOK hiccups along the way are highly likely. EUR/SEK: Eurozone exposure a drag on SEK   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/SEK 10.80 Neutral 10.85 10.70 10.60 10.40 10.50 Riksbank’s policy: The Riksbank delivered more than one hawkish surprise in 2022, including a 100bp rate hike. This appeared to be part of a front-loading operation where lifting the krona was seen as a welcome side effect. In practice, and like in many other instances in the G10, the high volatility environment meant that short-term rate differentials played a negligible role in FX. So, despite a wide EUR-SEK negative rate differential throughout 2022, SEK was unable to draw any real benefit. That differential has now evaporated, but we expect 125bp of tightening (rates at 3.0%) in Sweden versus 75bp in the eurozone, which could suggest some EUR/SEK downside room in a more stable market environment. Also, a slowdown in FX purchases by the RB, now that reserves are back to the 1H19 levels, should remove some of the pressure on SEK. European picture: Sweden is a very open economy with more than half of its exports heading to other EU countries. Our expectations are that 2023 will see a rather pronounced eurozone recession and that the energy crisis will extend into the end of next year. Barring a prolonged period of low energy prices (and essentially an improvement in the geopolitical picture) in Europe, we doubt SEK will be able to enter a sustainable appreciation trend in 2023 as sentiment in the eurozone should remain depressed. Valuation: We are not fans of the euro in 2023, which means that our EUR-crosses forecasts reflect the weaker EUR profile. We see some room for EUR/SEK to move lower throughout the year – also considering that we estimate the pair to be around 9.0% overvalued. However, the high risk of a prolonged energy crisis in the eurozone means that SEK is significantly less attractive than other pro-cyclical currencies next year. Incidentally, SEK is highly correlated to the US tech stock market, which looks particularly vulnerable at the moment. A return to 10.00 or below would likely require a significant improvement in European sentiment. USD/CAD: Loonie is an attractive pro-cyclical bet   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/CAD 1.33 Bearish 1.34 1.32 1.30 1.26 1.24 Commodities and external factors: Our commodities team expects Brent to average slightly above $100/bbl next year, and Western Canadian Select around $85/bbl. Along with our expectations for higher gas prices, the overall commodity picture should prove rather supportive for the Canadian dollar in 2023. In our base-case scenario, where global risk sentiment gradually recovers but two major risk-off forces – Ukraine/Europe and China – remain, CAD would be in an advantageous position, since Canada has much more limited direct exposure to China and Europe compared to other commodity-exporting economies.  Domestic economy: If the US proves to be a relative 'safe-haven' in the global recession, therefore withstanding the downturn better than other major economies like the eurozone, this should offer a shield to Canada’s economy, which is heavily reliant on exports to the US. There is probably one major concern for the domestic economy: house prices. Canada is among the most vulnerable housing markets in the world, with price-to-income ratios around 9x in many cities (compared to 5-6x in the US). Whether we’ll see a sizeable but controlled descent or a fully-fledged housing crash will depend on the Bank of Canada and the depth of the recession. Monetary policy and valuation: It does appear that the BoC has started to consider domestic warning signals (probably, also house prices), and recently shifted to a more moderate pace of tightening. Markets are currently expecting rates to peak around 4.25/4.50% in Canada, and we tend to agree. Barring a rapid acceleration in the unemployment rate, a housing crash should be averted. It is also likely that the BoC will start cutting before the Fed in 2023. All in all, accepting the downside risks stemming from the housing market and/or a further deterioration in risk sentiment, we see room for a descent in USD/CAD to the 1.25 level towards the end of 2023. In our BEER model, CAD is around 20% undervalued in real terms. AUD/USD: Riding Beijing’s roller coaster   Spot Year ahead bias4Q221Q232Q233Q234Q23 AUD/USD 0.68 Mildly Bullish 0.66 0.66 0.68 0.69 0.70 Exposure to China: The Australian dollar is a high-beta currency, and the direction of global risk sentiment will be the key driver next year. We think that a gradual recovery in sentiment will be accompanied by a still challenging energy picture, which may force investors to choose which pro-cyclical currencies to bet on. When it comes to AUD, the China factor will remain very central, as Australia has the most China-dependent export machine in the G10. Our economics team’s baseline scenario is that the real estate crisis will be the main drag on growth in China and while retail should recover on looser Covid rules, slowing global demand should hit exports. One positive development: the new Australian government is seeking a more friendly relationship with Beijing, paving the way for the removal of export curbs next year. Commodities and growth: Iron ore remains Australia’s main export (estimated at $130bn in 2022), and it is a very sensitive commodity to China's real estate sector. Our commodities team thinks a return to $100+ levels is unlikely given the worsening Chinese demand picture, but still forecasts prices to average $90/t in 2023. The second and third largest exports are oil and natural gas ($100bn combined). Here, we see clearly more upside room for prices, especially on the natural gas side. On balance, we expect the commodity picture for Australia to be rather constructive next year, which could offer a buffer to the Australian economy during the downturn. Growth in 2022 should have topped the 4% mark, but that will be much harder to achieve in 2023. The combination of higher rates, reset mortgages, a slowing housing market and possibly softening labour market should bring growth back closer to 3%. This would still be an extremely strong outcome against the backdrop of global weakness.   Monetary policy and valuation: The Reserve Bank of Australia has been one of the 'pioneers' of the dovish pivot, and a return to 50bp increases seems unlikely, as the Bank is probably monitoring the rather overvalued housing market, and the inflation picture is less concerning than in the US or in Europe. Most Australian households have short-term fixed mortgage rates, and we could see a deterioration in disposable income (especially at the start of the year). We think the RBA will be careful to avert an excessively sharp housing contraction, and we expect rates to peak at 3.60% (well below the Fed and the Reserve Bank of New Zealand) and cuts from 3Q23. This would mean a less attractive carry – and less upside risk in an optimistic scenario for global sentiment; but also less damage to the economy, which may play in AUD’s favour in our baseline scenario. Valuation highly favours AUD, as the positive terms of trade shock means that AUD/USD is 20% undervalued in real terms, according to our behavioural equilibrium exchange rate (BEER) model. We have a moderately upward-sloping profile for the pair in 2023, but high sensitivity to risk sentiment and China suggests downside risks remain high. NZD/USD: Dodging the housing bullet   Spot Year ahead bias4Q221Q232Q233Q234Q23 NZD/USD 0.62 Mildly Bullish 0.60 0.60 0.62 0.63 0.64 Monetary policy: The Reserve Bank of New Zealand has given very few reasons to believe it is approaching a dovish pivot. Markets are currently expecting the Bank to hike well into 2023, and take rates to around 5.0%. While inflation (7.2% year-on-year) and job market tightness (unemployment at 3.3%) both remained elevated in the third quarter, there are growing concerns about the rapid downturn in the New Zealand property market, which in our view will trigger either an earlier-than-expected end to the tightening cycle or a faster pace of rate cuts in 2023. Housing troubles: The RBNZ recently published its financial stability report, where it showed relatively limited concern about households’ ability to withstand the forthcoming downturn in house prices. In its August 2022 forecasts, the RBNZ estimated that the YoY contraction in house prices will reach 11.6% in the first quarter of 2023. However, that implied an Official Cash Rate at 4.0%, so only 50bp of extra tightening from now, which seems too conservative now. House prices have fallen 7.5% from their first quarter 2022 peak so far, but the trend may well accelerate, especially given a hawkish RBNZ and the risk of slowing global demand hitting the very open New Zealand economy. External drivers and valuation: Even assuming a constructive domestic picture in the housing market and an attractive yield for the currency in 2023, external factors will determine how much NZD can draw any benefit. As for AUD, risk sentiment and China are the two central themes. The New Zealand dollar is more exposed to risk sentiment (as it is less liquid and higher-yielding) than AUD, but probably less exposed to China’s story. In particular, the real estate troubles in China may well hit Australia via the iron ore channel, while NZ exports (primarily dairy products) are much more linked to China’s Covid restrictions, which look likely to be gradually scaled back. In our base case, the two currencies should largely move in tandem next year. The real NZD/USD rate is 15% undervalued, according to our BEER model. EUR/DKK: Tricky mix of intervention and rates   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/DKK 7.44 Neutral 7.44 7.44 7.44 7.44 7.45 Central bank policy: Danmarks Nationalbank delivered FX intervention worth DKK45bn in September and October to defend the EUR/DKK peg. On 27 October, it opted for a smaller rate hike (60bp) compared to the ECB (75bp), which briefly sent EUR/DKK close to the 7.4460 February highs before rapidly falling back to 7.4380/90. We think it will be a busy year ahead for the central bank, as we expect very limited idiosyncratic EUR strength and potentially more pressure on EUR/DKK. Having now exited negative rate territory, DN has much more room to adjust the policy rate for a wider rate differential with the ECB if needed. However, with inflation running above 10% in Denmark, DN may prefer FX intervention over dovish monetary policy to support the peg. We have recently revised our EUR/DKK forecast, and expect a return to 7.4600 only in 2024. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  

Summary:  With FOMC meeting minutes out and two Fed speakers to stand up, the USD is on watch along with equities that could be at risk of taking a haircut. Any hint of more hawkish comments could spark a knee-jerk reaction to the upside in the USD, which means equities could move into a risk-off mode. Focus is also on NZD with RBNZ poised to hike by 0.75%. The NZDAUD is worth watching given the RBNZ is hiking harder than the RBA can, which theoretically supports NZDAUD. In China, attention will be on how local authorities respond to outbreaks and how commodities respond. Companies that make most of their revenue from China are also in focus like Fortescue Metals (FMG). Plus why buy now pay later equities are again on notice. And the Saxo Strats 2022 World Cup Predictions are here. FOMC minutes and more Fed speakers to be key for terminal rate pricing The FOMC minutes from the November 2 meeting are scheduled to be released on Wednesday, just ahead of the Thanksgiving holiday. The key message delivered by Powell at this meeting was that the pace of rate hikes will slow down as needed, and that will likely remain the highlight of the minutes as well. However, Powell managed to deliver this message hawkishly at the press conference, but the risk from the minutes remains tilted to the dovish side. There is likely to be little consensus about whether the rates are in restrictive territory or there’s still room for that, and the divide within the committee remains key to watch as investors remain on the edge to expect a Fed pivot sometime in 2023. We have heard multiple Fed speakers over the past week, after a significant downside surprise in US CPI prompted a move lower in Fed’s terminal rate projections and fuelled significant easing of financial conditions as equity and bond markets rallied and the US dollar weakened. Waller and Bullard have tilted on the hawkish side, while the usual-dove Brainard remained more balanced as she repeated the message on cumulative tightening and being data-dependent. Daly, Mester, George and Bullard will be on the wires this week. In China, attention will be on how local authorities respond to outbreaks and implement pandemic control measures. Watch how commodities respond The economic calendar in China is light this week. However authorities may respond to China’s first Covid-related death in almost six months and the surge in new cases, which have hit their highest levels since April last year. There is concern there could be tighter restrictions, while China implements its new 20-point tweaking covid restriction plan, aimed at minimising disruptions to people’s daily lives and the economy, while adhering to zero-Covid. Officials will find it difficult to balance this, as well as the surge in cases. As such, commodities pegged to Chinese demand are front and centre again this week. The iron ore price is lower on Monday down 4% on fears China could increase restrictions, but the key steel ingredient holds onto a gain of 23% this month. This means stocks that make most of their revenue from China are also in focus like Fortescue Metals (FMG) which is up 30% this month, after China announced a somewhat property rescue package. Oil prices will continue to remain volatile as well as global growth and China lockdowns remain on watch, and the deadline for European sanctions on Russia crude also looms. Flash PMIs on the radar for US, UK and EU The S&P flash PMIs for the US, EU and UK will be released in the week, and will likely test the soft landing rhetoric that has been gaining traction. We will likely see further broad-based easing in the metrics from the October prints, as consumer spending remains constrained amid high inflation and a rise in interest rates. While expectations for December remain tilted towards a downshift in rate hikes for the Fed, ECB and the BOE, the upcoming data point will be more key in determining the terminal rate pricing. Markets are now back at pricing 5% levels for the Fed, but the ECB’s pricing for the terminal rate is still sub-3% while UK’s is 4.7% with fiscal austerity being delayed. RBNZ’s hawkishness to continue to outperform while Riksbank to play catchup The monetary policy decision from the Reserve Bank of New Zealand (RBNZ) will be key on Wednesday to determine the direction of NZD, which has seen strong gains over the past month from higher hawkishness. After a series of 50bps rate hikes, there are some expectations that RBNZ could deliver a 75bps rate hike this week, as inflation and labour market conditions support the case for further front-loading. Inflation has reached 7.2% YoY in Q3 – well above the RBNZ’s 1-3% target. Most members of the RBNZ shadow board also supported a 75bps rate hike. Meanwhile, the Riksbank has been lagging other G10 central banks in tightening policy and is now playing catch up after delivering a 100bp hike in September. The Riksbank is expected to deliver a 75bps hike on Thursday while another 100bps hike can’t be ruled out. Key earnings to watch this week; from Virgin, to Dell to two Chinese companies  Virgin Money, which is one of the UK’s biggest banks reports earnings this week, as well as the agricultural giant Deere & Co and the PC juggernaut, Dell. Separately, as discussed in Peter Garnry’s note, the highlight may be from Kuaishou Technology and Xioami, as Chinese equities have recently rallied amid the country’s fine-tune pandemic control measures. Nonetheless, increasing regulation in the private and technology sectors have still caused headwinds. The two Chinese earnings results are not expected to be blockbusters, but their outlooks may give investors a glimpse through the curtain. Buy now pay later equities again on notice Buy now pay later (BNPL) companies could be further bruised this week, with the Australian government considering policies that could see BNPL firms subject to the same rules as credit card providers. This could not only affect Australian firms but global companies which operate in Australia, such as Block (SQ, SQ2) - which owns Afterpay and Affirm (AFRM). The Australian government is weighing up options to strengthen the BNPL Industry Code, and perhaps introduce an affordability test or put the BNPL companies under the Credit Act. Such a move would ensure BNPL companies that operate in Australia, would work within the guardrails as other credit providers. Companies to watch include Zip, Block and Affirm. Sentiment could also flow to other BNPL companies including Japan’s GMO Payment Gateway and India’s Paytm. Saxo Strats 2022 World Cup Predictions: the Netherlands has the highest probability of being the champion In this article, Peter Garnry, Saxo’s Head of Equity Strategy shows how Saxo Strats used quantitative analysis to predict the winner of the 2022 World Cup and came up with a non-consensus result: expecting the Netherlands to win.   Key economic releases & central bank meetings this week Monday, Nov 21 Germany Producer Prices (Oct) Taiwan Export Orders (Oct) Tuesday, Nov 22 New Zealand Trade (Oct) Eurozone Consumer Confidence (Nov, flash) Wednesday, Nov 23 Japan Market Holiday Australia S&P Global Flash PMI, Manufacturing & Services UK S&P Global/CIPS Flash PMI, Manufacturing & Services Germany S&P Global Flash PMI, Manufacturing & Services France S&P Global Flash PMI, Manufacturing & Services Eurozone S&P Global Flash PMI, Manufacturing & Services US S&P Global Flash PMI, Manufacturing & Services New Zealand Cash Rate (23 Nov) Singapore Consumer Price Index (Oct) United States Durable Goods (Oct) United States Initial Jobless Claims United States UoM Sentiment (Nov, final) United States New Home Sales (Oct) US Fed FOMC Meeting Minutes (Nov) Thursday, Nov 24 US Market Holiday Japan au Jibun Bank Flash Manufacturing PMI South Korea Bank of Korea Base Rate (Nov) Japan Leading Indicator (Sep) Germany Ifo Business Climate (Nov) Friday, Nov 25 US Market Holiday (Partial) New Zealand Retail Sales (Q3) Singapore GDP (Q3, final) United Kingdom GfK Consumer Confidence (Nov) Germany GDP (Q3) Germany GfK Consumer Sentiment (Dec)   Key earnings releases this week Monday: Virgin, Compass, Agilent Technologies, Zoom Video, Dell Technologies Tuesday: Kuaishou Technology, Medtronic, Analog Devices, VMware, Autodesk, Dollar Tree, Baidu, HP, Best Buy Wednesday: Xioami, Prosus, Deere Friday: Meituan, Pinduoduo Source: https://www.home.saxo/content/articles/macro/saxo-spotlight--21-nov-2022-no-video-21112022

NZDUSD meets with a fresh supply on Monday amid some follow-through USD buying interest. COVID-19 hitters, geopolitical risks benefit the greenback and weigh on the risk-sensitive Kiwi. The downside seems limited ahead of the RBNZ decision and the FOMC minutes on Wednesday. The NZDUSD pair comes under some selling pressure on the first day of a new week and moves further away from a nearly three-month high - levels just above the 0.6200 mark touched on Friday. The pair remains depressed through the early part of the European session and is currently flirting with the daily low, around the 0.6120 region. The US Dollar builds on last week's recovery from its lowest level since August 12 and gains traction for the third successive day, which, in turn, is seen weighing on the NZDUSD pair. The better-than-expected US Retail Sales released on Thursday cast doubts on the peak inflation narrative. Furthermore, hawkish signals from several Fed officials suggest that the US central bank is still far from pausing its policy-tightening cycle and continues to act as a tailwind for the buck. Apart from this, a generally weaker tone around the equity markets provides an additional lift to the safe-haven greenback and drives flows away from the risk-sensitive Kiwi. The market sentiment remains fragile amid worries about headwinds stemming from a new COVID-19 outbreak in China and the imposition of economically-disruptive lockdowns. Apart from this, fears of a potential escalation in the Russia-Ukraine conflict temper investors' appetite for perceived riskier assets. The fundamental backdrop favours the USD bulls and supports prospects for additional intraday losses for the NZDUSD pair. Traders, however, might prefer to move to the sidelines ahead of this week's key event risks. The Reserve Bank of New Zealand is scheduled to announce its policy decision on Wednesday, which will be followed by the release of the FOMC meeting minutes. This, in turn, warrants some caution for aggressive bearish traders and positioning for a further depreciating move.

The Reserve Bank of New Zealand will hold its last meeting of 2022 on Wednesday. Unlike most of the leading central banks in the world, members of the RBNZ meet only seven times a year. That's why each meeting attracts the attention of NZD/USD traders. And the November meeting will not be an exception. According to most experts' forecasts, the New Zealand central bank will raise the interest rate by 75 basis points, thus bringing it to 4.25%. Take note that the RBNZ raised the OCR rate by 50 points at the October meeting, as well as at the previous four meetings. However, at the final press conference, RBNZ Governor Adrian Orr admitted that they considered delivering a 75 bps hike. And yet the RBNZ was hesitant to accelerate the pace of monetary tightening, although it admitted that inflation was unacceptably high, so "there's still a lot of work to be done." As it turned out a little later, inflation is not only at a high level, but has no intention of slowing down.     The RBNZ's previous meeting was held on October 5, and the latest data on CPI growth in New Zealand was published on October 18. To the central bank's disappointment, the inflation rate soared again in the third quarter, significantly exceeding the forecasted levels. The consumer price index rose 2.2% in quarterly terms (against a forecast of 1.5%) and jumped to 7.2% year-over-year, against a forecast of a slowdown to 6.5%. In addition, the latest monetary conditions survey conducted by the central bank was published in early November. It turned out that New Zealand's inflation expectations rose across the time curve in the fourth quarter of 2022. Specifically, average one-year inflation expectations jumped to 5.1% from 4.9% seen in the third quarter of this year. Read next: Euro lost about a percent yesterday! Euro to US dollar - forecast - November 22nd| FXMAG.COM Given this disposition, it is possible to assume that the RBNZ members will consider the 75 bps hike tomorrow. Moreover, according to most currency strategists of big banks, this scenario is currently the basic one. Its realization will support the kiwi, because the hawkish mood has intensified even after the inflation report. But if the central bank keeps the moderate pace of rate hikes (i.e. increases it by 50 points to 4.0%), the pair will be under a lot of pressure. However, all indirect signs indicate that the RBNZ will decide to be more aggressive in curbing inflation. In that case, the NZD might get some short-term support against the greenback. However, upward surges in the NZD/USD pair should be used as a reason to open short positions. Moreover, the November FOMC meeting minutes will be released on the same day (i.e., November 23). This document can provoke a dollar rally, and the pair will not be an exception here. Even in case the OCR rate increases by 75 points. Since November 14, that is, since last Monday, the pair has been trading in a wide-range 100-point flat, alternately going from the limits of the 0.6080-0.6190 range. The bears are not able to find a foothold within the 60s figure. The bulls are not able to test the 62nd figure. At the end of tomorrow the scales will tip in one direction or the other. And in my opinion, the US dollar is in a better position here. Traders have already played back the news that the Federal Reserve will slow down the pace of monetary policy tightening - now they are concentrating on the scale of tightening the monetary policy. And this issue is currently debatable. In this context, the Fed's minutes, which will be published on Wednesday, is especially important. All the information of this document will be considered through the prism of the latest CPI growth report. The hawkish sentiment of most Committee members, the message that the final interest rate level will be higher (than previously expected) and the willingness to keep rates high even if inflation slows down - all these signals will greatly strengthen the dollar's position. At the same time, the RBNZ's 75 bps hike in the OCR rate has already been partly factored into current prices. The very fact of the realization of the 75-point scenario is likely to have a short-term impact on the pair. Thus, the upward price surges of the NZD/USD should be used as a reason to open short positions. The first bearish target is 0.6020 (the Tenkan-sen line on the one-day chart). The main target is slightly below, at 0.5950. At this price point the average Bollinger Bands line coincides with the upper limit of the Kumo cloud on the same chart. Relevance up to 00:00 2022-11-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327722

Despite a goal-rich start at the World Cup in Qatar, markets are all about defense right now. New Covid restrictions in China are fuelling a return to the safe-haven dollar while investors wait for tomorrow's FOMC minutes. This may be laying the groundwork for a broader USD recovery into year-end. Elsewhere, we expect a 50bp rate hike by the RBNZ In this article USD: Recovery mode EUR: Preparing for a longer downtrend NZD: We expect a 50bp hike by the RBNZ CEE: EU disputes turn the spotlight from Hungary's central bank   USD: Recovery mode China’s Covid situation has suddenly returned as a very central driver for global markets this week. Over 27,000 cases were reported today, with the city of Guangzhou being the new epicentre of the outbreak, and local authorities are reportedly scrambling to impose those same restrictive measures that appeared a thing of the past after recent signals from the central government that the zero-Covid policy would be gradually abandoned. In FX, this has fuelled a return to the dollar. After all, optimism on China’s outlook was one of the two key forces - along with speculation about a dovish pivot by the Fed – behind the sharp dollar correction earlier this month. On the Fed side, tomorrow’s minutes will be important to watch, but the recent Fedspeak has undoubtedly added a layer of caution to the dovish pivot enthusiasm, which could mean investors may also be more reluctant to overinterpret dovish signals from the minutes. We have a few speakers to monitor today amid a very light data calendar in the US: Loretta Mester, James Bullard (both hawks) and Esther George (more neutral). Another theme to watch today will be the reported OPEC+ plans to increase output. The news caused an acceleration in the crude sell-off yesterday, with Brent trading below $85/bbl before recovering after the Saudis denied the reports. Should output hike speculation mount again, expect some pain for commodity currencies, as the combination with resurging Covid restrictions in China could prove quite toxic. We continue to see the dollar at risk of new brief bearish waves this week, but we note that the environment has now turned more benign for the greenback, and this may be laying the groundwork for a re-appreciation into year-end, which is our baseline scenario. We could see some consolidation around 107.50/108.00 in DXY today. Remember that liquidity will run significantly thinner in the second half of the week as the US enters the Thanksgiving holiday period. Francesco Pesole EUR: Preparing for a longer downtrend EUR/USD plunged back to the 1.0250 area as markets jumped back into defensive dollar trades yesterday. Indeed, the negative impact of China’s new Covid wave on the rather exposed eurozone economy and of an ever-concerning situation in Ukraine are overshadowing the positives of lower energy prices. We see further room for a contraction in EUR/USD this winter and continue to target sub-parity levels into the new year, as discussed in our 2023 FX Outlook. The eurozone calendar includes consumer confidence data (which is expected to have marginally recovered) and speeches by the European Central Bank's Robert Holzmann, Olli Rehn and Joachim Nagel. Expect some support at 1.0200 in EUR/USD: a decisive break below that level could underpin the return to a bullish dollar narrative and unlock more downside risks. Francesco Pesole NZD: We expect a 50bp hike by the RBNZ The Reserve Bank of New Zealand will announce monetary policy at 0100 GMT tomorrow, and it is a close call between a 50bp and a 75bp hike. As discussed in our meeting preview, we see 50bp as more likely, as signs of an accelerating housing market contraction warn against an overly aggressive approach. Markets (66bp in the price) and the majority of economists are, however, leaning in favour of a 75bp move. New rate and economic projections will also be released, and there are some key questions to be answered. The first of these is where the RBNZ will place the peak rate, which is currently at an unrealistic 4.10% (rates are at 3.50% now), so should be revised to 5.0% or higher, and how many cuts will be included in the profile. The second is how much more pain will be included in the forecasts for the housing market. Third is how fast inflation is projected to drop given the higher CPI readings for 3Q but more aggressive tightening. A half-point hike would likely be seen as a dovish surprise by markets at this point, but a significant revision higher in rate projections could mitigate any negative impact on the New Zealand dollar. Either way, expect any post-meeting NZD moves to be short-lived, as global risk dynamics and China news will soon be back in the driver’s seat for the currency. NZD/USD is at risk of falling back below 0.60 before the end of this year, while we target a gradual recovery to 0.64 throughout the whole of 2023. Francesco Pesole CEE: EU disputes turn the spotlight from Hungary's central bank Today is the busiest day in CEE this week. In the morning we start with the monthly indicators in Poland. The main focus will be industrial production for October, as a leading indicator for the rest of the region. Polish industrial production is benefiting from an improvement in supply chain functioning, which supports export-oriented industries, including automotive and electrical products. We expect only a slight slowdown from 9.8% to 8.8% year-on-year, above market expectations. Labour market numbers should confirm the still tight conditions with wage growth of 13.8% YoY. PPI will confirm continued price pressures in the economy with the YoY number accelerating from 0.2% to 1.1% in October. From a market perspective, today's numbers may be perceived as having implications for the National Bank of Poland's economic outlook and monetary policy. After all, it is wage growth that has been the biggest surprise to the central bank's forecast in the past. Thus, today's numbers may revive market hopes for an additional rate hike and support the zloty in the short term. However, we remain bearish in the medium term with a forecast of 4.90 EUR/PLN at the end of this year. Later today we will see the National Bank of Hungary (NBH) meeting. We do not expect any fireworks at this rate-setting meeting. The latest data regarding inflation and GDP were broadly in line with the central bank's expectations and the next staff projection update is only due in December. Against this backdrop, we don't see any game-changing moves. When it comes to the risk environment, we haven't seen a material improvement in domestic or external risk factors, which were flagged by the central bank as triggers to consider changes in its monetary stance. The Hungarian forint has been hovering in the 400-415 EUR/HUF range for the past few weeks, far from the NBH's pain threshold. The market is pausing in place, awaiting news from the Hungarian government's negotiations with the European Commission. These could theoretically come today, which would overlay today's NBH meeting. However, from last week's hints, it is likely that we will hear more bad news before any good news comes, which may cause further volatility in the FX market. However, a happy ending to this saga should see the forint below 400 EUR/HUF in our view. Frantisek Taborsky Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The New Zealand dollar has rebounded on Tuesday with strong gains. In the European session, NZD/USD is trading at 0.6151, up 0.83%. Will RBNZ go all out? The Reserve Bank of New Zealand has been tightening aggressively, delivering five straight 50-point hikes. The cash rate is currently at 3.5%, but this hasn’t achieved the goal of taming red-hot inflation. In the third quarter, CPI was almost unchanged, nudging lower to 7.2%, after a 7.3% gain in Q2. This was much higher than the RBNZ’s projection of 6.4%. With inflation expectations at 40-year highs, there is pressure on the bank to press the rate pedal to the floor. The RBNZ will make its rate decision on Wednesday, with the markets expecting a 75-point hike, which would be the bank’s largest rate increase on record. Policy makers are confident that the economy can withstand a 75-point increase. The labour market remains tight, with unemployment at a near-record low of 3.3%, and the economy has recovered impressively from the Covid pandemic. There is clearly a risk that a jumbo rate hike will cause a harder landing than the RBNZ would like, but inflation remains priority number one. With the next rate decision not until late February, the RBNZ may want to make a loud splash at tomorrow’s meeting. The recent US inflation report unleashed a wave of exuberance, sending equity markets higher and the US dollar on a nasty slide. Investors became more confident that Fed was close to a pivot in its aggressive policy and risk sentiment soared. The Fed has pushed back with Fed members delivering hawkish statements and projections, which has chilled risk appetite and stabilized the US dollar. Fed member Mary Daly weighed in on Monday, stating that inflation remained unacceptably high and projecting that the fed funds rate will peak at 4.75%-5.00%.   NZD/USD Technical There is resistance at 0.6072 and 0.6202 0.5955 and 0.5871 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

On the 4 hour chart kiwi shows that hidden deviations appear between price movements and the CCI indicator which confirms if in the near future NZD/USD will have the potential to rally upwards to the nearest liquidity gathering place, namely in the Equal High area, namely at the level of 0.6201 but if the CCI level drops below the level 0 and/or level 0.6962 is exceeded, it is very likely for the scenario described earlier cancel by itself. Relevance up to 05:00 2022-11-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/114437

The Reserve Bank of New Zealand (RBNZ) hiked the official cash rate by 75 bps to 4.25%. FX markets responded well to the news, with the Kiwi spiking. Economists at ANZ Bank expect the decision to support the NZD. Recession fears may weigh on the Kiwi “Markets went into today’s decision pricing in favour of a 75 bps hike, and they got it. What they were unprepared for was the magnitude of the upgrade to the RBNZ’s OCR track, which now peaks at 5.5%. The RBNZ’s track is a technical projection, and it’s not supposed to signal that policy is on a pre-set path, but if we try to back-solve what is implied at each decision by the track, it points to another 75 bps hike in February, followed by 25 bps hikes in April and May.” “We think this decision will ultimately be NZD supportive on the grounds that the RBNZ’s track points to the OCR coming to rest above where markets expect the US Fed Funds rate to peak (markets are pricing in a 5.08% peak).” “Getting on top of inflation should also be positive for the NZD in that it should reduce the need for markets to price in an inflation discount to the real exchange rate. However, this decision will stoke recession fears, and that may weigh on the Kiwi.”  

The Reserve Bank of New Zealand raised the official cash rate (OCR) by 75 bps to 4.25% at its November meeting. As a result, the NZ interest rate rose to its highest level since January 2009. The RBNZ's decision was in line with market consensus. Wednesday's hike was the largest rate hike in the history of the central bank, which appears to be continuing its efforts to curb high inflation ahead of the upcoming RBNZ hiatus. The next scheduled meeting will not take place until 2023. Today's hike decision was the ninth in a row, meaning the OCR rate has risen 400 bps since October 2021, the most aggressive tightening by the RBNZ since 1999, according to tradingeconomics. RBNZ fights inflation New Zealand's central bank board said core consumer price inflation is too high, employment is above sustainable levels and short-term inflation expectations have risen. The committee signaled that more rate hikes may be on the way, assuming the OCR peaks at 5.5% in September 2023. Policymakers mentioned that they are aware that the spending decisions of many households will be largely constrained by rising debt service costs. A reduction in aggregate demand is expected to cause a temporary decline in GDP of about 1 percentage point from 2023, according to the RBNZ's statement to the interest rate decision. NZD highest since August 2022 The rate of the NZD/USD pair has been on the rise for six weeks, which seems to look like a better streak for the NZD since late 2020. This may also be due to the fact that interest rates in New Zealand may reach higher levels than in the United States. Additionally, the pace of hikes in the U.S. may already be lower, which, from an interest rate market perspective, may support the NZD exchange rate. Since the beginning of the month, the New Zealand dollar seems to have gained more than 6 percent against the US dollar. As a result, among the world's major currencies, the NZD is the strongest currency against the USD. In second place this month is the Japanese yen, with a strengthening of more than 5 percent. Source: Conotoxia MT5, NZDUSD, Weekly Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.     

The New Zealand dollar has extended its rally on Wednesday. In the European session, NZD/USD is trading at 0.6181, up 0.47%. RBNZ delivers record hike The Reserve Bank of New Zealand pushed the rate pedal to the floor today, with a supersize rate hike of 75 basis points, a record high. This raised the cash rate to 4.25%, up from 3.5% and the highest level since 2008. The move was widely expected, but nonetheless, it sent bond yields and the New Zealand dollar higher. The RBNZ is forecasting that the cash rate will peak at 5.5% in 2023, which means there’s plenty of life left in the current rate-tightening cycle, with the RBNZ currently boasting the highest cash rates among the major central banks. The bank has designated inflation as public enemy number one, but despite a series of oversize hikes, there are no signs that inflation has peaked. In the third quarter, CPI was almost unchanged in Q3, nudging lower to 7.2%, following a 7.3% gain in Q2. This figure caught the RBNZ off guard, as the bank projected that CPI in Q3 would slow to 6.4%. The Monetary Policy Statement was decidedly hawkish, noting that “core consumer price inflation is too high” and “near-term inflation expectations have risen.” How will New Zealand’s economy fare after the latest rate hike? The labour market remains tight, with unemployment at a near-record low of 3.3%, and the economy has recovered impressively from the Covid pandemic. Still, the RBNZ statement forecasted that the economy will tip into recession in June 2023 and that inflation would accelerate to 7.5% in the fourth quarter and would not fall back to the midpoint of the 1%-3% target until 2025. The RBNZ has taken off the gloves, but the prolonged battle against inflation will not end anytime soon. The US will release the FOMC minutes later today, which could impact on the movement of NZD/USD. Investors will be looking for hints about what the Fed has planned at the December 12th meeting. The markets have priced in a 50-basis point hike, although there is an outside chance of a 75 bp increase.   NZD/USD Technical There is resistance at 0.6217 and 06283 0.6139 is providing support, followed by 0.6095, a monthly support line This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

Summary:  The US dollar is mixed ahead of a raft of second-tier data points later today and the FOMC minutes tonight, with focus on the scale of disagreement among Fed members on the tightening path from here. A long Thanksgiving weekend is set to follow. Elsewhere, the kiwi has found another leg up on the RBNZ hiking by 75 basis points, the most ever, overnight, while sterling dodged a bullet as the UK Supreme Court ruled against Scottish independence referendum proceeding. FX Trading focus: RBNZ surprises (some) with 75 basis point hike. USD scratching around for direction. The market was about evenly split on whether the RBNZ would rock the boat with a largest.-ever rate hike overnight, which is what it delivered, taking the rate +75 bps to 4.25% and guiding rather hawkish, which helped to rise the peak rate expectation into next spring some 30 basis points toward 5.50%. This drove a bit more NZD strength, but as the currency has been on such a strong run lately, the shock value was minimal in market pricing. I suspect that while there may be a bit more to wring out of the situation here, we are very likely at peak hawkishness from the RBNZ in relative terms to other central banks. The RBNZ was one of the first G10 central banks to cease and desist with QE and begin hiking rates and the impact on NZ economic growth will mount aggressively in coming months. AUDNZD, for example, has also been helped lower not just by RBNZ hawkishness, but by the Aussie’s greater sensitive to the frustration over China’s now-you-see-it, now-you-don’t reopening process. The US dollar continues to scratch around for direction, dipping yesterday on the ideal combination for USD bears, falling long US Treasury yields and strong risk sentiment. As discussed in my Monday update, the heavy hitting data doesn’t arrive until next week with the Friday jobs and earnings data the chief focus, followed by December 13 November US CPI release.  These CPI releases have the market tied in knots – it is beginning to look a bit one-dimensional, and the market may need to broaden its focus on the implications of an incoming recession soon, but more incoming data needed to point that recession is perhaps necessary first. I don’t have my hopes up for any revelations from tonight’s FOMC Minutes release, although interesting to see if there are obvious signs of disagreement on how to guide for the slowdown in tightening, as well as whether “a few”, “some”, or even “several” Fed members make a fuss about financial conditions easing aggressively. As most of that easing has taken place after the FOMC meeting itself, it is doubtful. Chart: GBPUSDSince the epic USD slide on the November 10 release of the softer-than-expected US October CPI data, the US dollar has done very little, while sterling has generally edged higher versus its most important peers on a further thaw in negative sentiment, even if the longer term outlook for the UK has been made that much more bleak by the latest budget announcement. Sterling and the US dollar will remain sensitive to new significant shifts in sentiment and in opposite directions. If we continue to see a melt-up inspired by mounting certainty that the Fed isn’t about to surprise the market any time soon and incoming data allows the market to indulge in soft-landing hopes for now (insufficiently strong data to raise inflation fears), GBPUSD may be able to drift back to 1.2000 and possibly even to the 200-day moving average above 1.2200 or even the major pivot highs into 1.2250+ from early August (!). On the flip-side, oncoming recession concerns are likely to only rise from here, which in past market cycles will eventually lead to a deterioration in financial conditions (currently close to the easiest they have been since the before the Fed started hiking in 75 basis point increments back in June) and weaker risk sentiment. The weather could also turn colder and remind investors of Europe’s energy predicament, a constant concern in the background. But it will take a lot of cable selling to suggest weakness – effectively, we would need to take out most of the move down to 1.1500 to reverse the November 10 move in USD weakness. Source: Saxo Group Sterling has enjoyed the risk-on backdrop, with GBPUSD probing well above 1.1900 this morning, with an added modest boost on the preliminary UK November PMI’s looking relatively benign (Services unchanged at 48.8 vs.  the story breaking that the UK Supreme Court ruled against a new Scottish independence referendum proceeding until the UK government had given permission for one to be held. I have been surprised at sterling’s strength even beyond the initial reset of the situation provided by the removal of Truss-Kwarteng and supposedly soothing stability on offer from Sunak-Hunt. Perhaps positioning is the key – the last short sterling holdouts haven’t been entirely flushed and the those that have already been flushed (or took profits) are in no rush to get involved just yet. It will likely take some time and a catalyst for a fresh weak sterling cycle to develop down the road. Table: FX Board of G10 and CNH trend evolution and strength.After this RBNZ meeting overnight, have to wonder if kiwi is soon or already has reached its peak potential. Elsewhere, interesting to note the CNH relative weakness against the market, tracking USD direction as it so often does after the brief period of underperformance about a month ago. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Not hanging my hat on any new developments here. AUDNZD has achieved a remarkable -6.1 reading in its negative trend strength reading. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights 1330 – US Oct. Preliminary Durable Goods Orders 1330 – US Weekly Initial Jobless Claims 1445 – US Nov. Preliminary Manufacturing and Services PMI 1500 – US Nov. Final University of Michigan Sentiment 1500 – US Oct. New Home Sales 1905 – US FOMC Meeting Minutes 1905 – New Zealand RBNZ Governor at Parliament committee 2130 – Canada Bank of Canada Governor Macklem to testify to parliament committee   Source: https://www.home.saxo/content/articles/forex/fx-update-kiwi-at-maximum-potential-after-super-sized-rbnz-hike-23112022

NZD/USD has surpassed the crucial hurdle of 0.6250 amid solid risk-on impulse. Federal Reserve policymakers are supporting the interest rate hike slowdown regime to reduce financial risks. The Reserve Bank of New Zealand sees the interest rate peak at 5.5%. NZD/USD is aiming to smash the round-level resistance of 0.6300 as RBNZ-Fed policy divergence has widened. NZD/USD is advancing firmly after overstepping the critical resistance of 0.6250 in the Asian session. The Kiwi Dollar has gained significant traction as the extent of optimism is skyrocketing in the currency market. The asset has continued its two-day winning streak and has refreshed its three-month high at 0.6270. The major is exposed to kiss the round-level resistance of 0.6300 amid no signs of amelioration in the positive market sentiment. A significant jump in investors’ risk appetite has weakened demand for the US Dollar. The US Dollar Index (DXY) is falling like a house of cards and has surrendered the cushion of 106.00. The mighty US Dollar is looking to test three month low at 105.34. Meanwhile, S&P500 futures are displaying strength ahead of the US holiday on account of Thanksgiving Day. The 10-year US Treasury yields have slipped below 3.69% as investors see no continuation of 75 basis points (bps) rate hike spell for the fifth time by the Federal Reserve (Fed). Federal Reserve policymakers vouched for decelerating interest rate hike pace A satisfactory October inflation report has eased some troubles for the Federal Reserve policymakers. Fed chair Jerome Powell and his mates are continuously making efforts to bring price stability. A decline in the headline Consumer Price Index (CPI) has delighted the Federal Reserve, which is visible in Federal Open Market Committee (FOMC) minutes. The majority of Federal Reserve policymakers have vouched for a slowdown in the interest rate hike pace to reduce financial risks and to observe the progress of efforts yet made in the form of restrictive policy measures. This has resulted in a significant fall in the US Dollar. Considering the persistent nature of inflation in the United States economy, Fed chair Jerome Powell will shift to a half-percent rate hike extent for December’s monetary policy meeting. Upbeat United States Durable Goods Orders failed to cushion the US Dollar Market participants always await indicators that depict demand by the households to make projections for Consumer Price Index (CPI) figures. The United States Durable Goods Orders data that display consumer demand for durables improved by 1% in October vs. the expectation and the prior release of 0.4%. This indicates that the consumer demand is robust and core CPI could display stagnancy ahead. This may end the plan of decelerating interest rates by the Federal Reserve. It is worth noting that households in the United States are addressing expenses with lower real income. Also, higher interest rates will result in higher interest obligations on purchases of durable goods, which could result in accelerating delinquency costs for credit providers. Reserve Bank of New Zealand sees interest rate peak at 5.5% On Wednesday, Reserve Bank of New Zealand Governor Adrian Orr hiked its Official Cash Rate (OCR) by 75 bps. This has widened the Reserve Bank of New Zealand-Federal Reserve policy divergence. In order to tighten its fight against a historic surge in inflation, the Reserve Bank of New Zealand ditched its 50 bps rate hike regime and went for a bigger rate hike. Earlier, the RBNZ hikes its OCR 50 bps consecutively five times. Price pressure in the New Zealand economy has not displayed signs of exhaustion and a peak yet, therefore, policy tightening will continue to accelerate further. The Reserve Bank of New Zealand has also provided an interest rate peak of 5.5%. Widened Reserve Bank of New Zealand-Federal Reserve policy divergence and hawkish interest rate guidance is likely to strengthen the Kiwi Dollar further and NZD/USD may smash 0.6300 sooner. NZD/USD technical outlook NZD/USD is marching towards the horizontal resistance placed from August 12 high at 0.6469 on a daily scale. The asset has comfortably established above the 61.8% Fibonacci retracement (placed from August 12 high at 0.6469 to October 13 low at 0.5560) at 0.6103. The pair has crossed the 200-period Exponential Moving Average (EMA) at 0.6233 for the first time in the past seven months. Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a bullish range of 60.00-80.00, which indicates more upside for the Kiwi Dollar.  

The New Zealand dollar continues to gain ground this week. In the North American session, NZD/USD is trading at 0.6267, up 0.35%. New Zealand will release retail sales for Q3 later in the day. The markets are expecting a small gain of 0.5%, which would be a turnaround from a disappointing -2.2% in Q2. Consumers continue to struggle with high inflation and rising interest rates, and after back-to-back declines, a gain in retail sales would be welcome news. Read next: G7 work on a Russian oil price cap, gold has gained as dovish Fed signals spread through the market| FXMAG.COM RBNZ delivers record hike The Reserve Bank of New Zealand delivered a huge 75-bp hike on Wednesday, which raised the cash rate to 4.25%. The move had been priced in by the markets, but the New Zealand dollar jumped 1.5%, thanks to the oversize move and a broadly-lower US dollar. The cash rate is the highest among major central banks, but there’s more to come. The RBNZ has projected a terminal rate of 5.5% in 2023, which means more rate hikes in 2023. Inflation has been stickier than the RBNZ anticipated, and the bank’s Monetary Policy Statement was decidedly hawkish, noting that “core consumer price inflation is too high” and “near-term inflation expectations have risen.” The statement said that inflation is expected to accelerate to 7.5% in Q4 and would not fall to the midpoint of the 1%-3% target until 2025. The RBNZ is ready for a long fight with inflation, but it remains to be seen if the bank can guide the economy to a soft landing. The Fed minutes reiterated that lower rates are on the way, which we’ve been hearing from a stream of Federal members over the past two weeks. The minutes were vague as far as a timeline, noting that smaller rate increases would happen “soon”, as the Fed continues to evaluate the impact of the current policy on the economy. Members also voiced concern that inflation was yet to show any signs of peaking. Still, the markets viewed the minutes as dovish, which is weighing on the US dollar today. NZD/USD Technical NZD/USD is testing resistance at 0.6283. Above, there is resistance at 0.6361 There is support at 0.6217 and 0.6139 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZD/USD higher ahead of retail sales - MarketPulseMarketPulse

The New Zealand Dollar has not been impacted much despite Retail Sales data missed estimates. NZD/USD is hoping for a cushion around the 20-MA (High-Low) band. A slippage in the RSI (14) to the 40.00-60.00 range is merely a loss of momentum, not a bearish reversal. The NZD/USD pair has attempted a recovery after dropping to near 0.6250 in the Asian session. The market mood is extremely quiet as investors are returning gradually after a holiday on account of Thanksgiving Day. Also, the USD Index (DXY) has turned flat after displaying a wild gyration in the morning trade. The Kiwi asset has not been impacted much after New Zealand Retail Sales missed estimates. The economic data landed at 0.4%, lower than the consensus of 0.5% but remained firmer from the prior release than the prior release of -2.3%. On an hourly scale, the Kiwi asset is looking for the ground near the 20-period Moving Average (High-Low) in the dimensions of 0.6252-0.6270. Broadly, the upward-sloping trendline placed from November 10 low at 0.5841 will act as a major support for the counter. Meanwhile, the Relative Strength Index (RSI) (14) has fallen into the 40.00-60.00 range from the bullish range of 60.00-80.00. This indicates that the New Zealand Dollar has lost momentum, however, the upside bias is still intact. Should the asset break above Thursday’s high at 0.6288, the New Zealand Dollar bulls will drive the asset towards August 1 high at 0.6353, followed by the round-level resistance at 0.6400. Alternatively, a decline below weekly lows at 0.6088 will drag the Kiwi asset toward November 14 low at 0.6061. A slippage below the latter will expose the major to drag further near the psychological support of 0.6000. NZD/USD hourly chart  

The New Zealand dollar has edged lower on Friday. In the European session, NZD/USD is trading at 0.6244, down 0.33%. Retail sales post modest gain It wasn’t a spectacular rebound by any means, but New Zealand’s retail sales showed a gain in Q3. Headline and core retail sales both rose a modest 0.4% QoQ. This follows a soft Q2, when headline retail sales came in at -2.2% and the core release at -1.5%. The reaction of NZD/USD was subdued, likely a result of the Thanksgiving holiday, with US markets open for limited hours today. Retail sales data may not be as positive in Q4, with the Reserve Bank of New Zealand hiking rates by a massive 0.75% this week. The RBNZ has signalled that household spending will have to drop in order to curb inflation, and with more rate hikes still to come, it’s clear that household spending will come down during the current rate-hike cycle. The Federal Reserve has telegraphed to the markets that it will continue to raise rates, despite the last inflation report, which was softer than expected. The Fed’s message, reiterated in this week’s minutes, remains somewhat mixed. On the one hand, the Fed has signalled that the pace of rates will be easing, and the markets have priced in a ‘modest’ 50 bp hike in December after four consecutive 75-bp increases. At the same time, some Fed members are projecting that the terminal rate will be higher than previously expected. There is uncertainty as to whether this “lower for longer” stance is bullish or bearish for the US dollar, a question we’ll have to wait for market participants to answer.   NZD/USD Technical NZD/USD faces resistance at 0.6283 and 0.6361 There is support at 0.6217 and 0.6139 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

NZD/USD remains under some selling pressure for the second successive day on Monday. A weaker risk tone benefits the safe-haven greenback and weighs on the risk-sensitive Kiwi. Bets for less aggressive Fed rate hikes cap the USD upside and help limit losses for the pair. The NZD/USD pair opens with a modest bearish gap on Monday and retreats further from its highest level since August 18 touched last week. The pair remains depressed through the early European session and is currently placed around the 0.6200 mark, just a few pips above the daily low. The global risk sentiment took a hit amid a wave of protests in China over the government’s zero-COVID policy, which has been fueling concerns about a deeper economic downturn. The anti-risk flow extends some support to the safe-haven US Dollar and turns out to be a key factor dragging the NZD/USD pair lower for the second straight day. That said, the prospects for a less aggressive policy tightening by the Fed keep a lid on any further gains for the greenback and should help limit losses for the major. It is worth recalling that the minutes of the November FOMC meeting released last Wednesday showed that most policymakers agreed it would soon be appropriate to slow the pace of rate hikes. Furthermore, the markets are now pricing in a greater chance of a relatively smaller 50 bps lift-off at the December FOMC meeting. This is reinforced by the ongoing downfall in the US Treasury bond yields, which should hold back the USD bulls from placing aggressive bets and lend some support to the NZD/USD pair. Apart from this, an unprecedented 75 bps rate hike by the Reserve Bank of New Zealand (RBNZ) last week supports prospects for the emergence of some dip-buying around the NZD/USD pair. This, in turn, makes it prudent to wait for strong follow-through selling before positioning for a deeper pullback. In the absence of any relevant economic data, traders on Monday will take cues from speeches by influential FOMC members - St. Louis Fed President James Bullard and New York Fed President John Williams.  

NZD/USD The currency quotes for the pair NZDUSD are shown in the screenshot of the chart. The chart still contains the geometrical constructions from the previous technical analysis. The pair's quotes tested the dynamic resistance level of $0.6217 at the time of writing. The upward trend that began on 10.10.2022 and reached a local maximum of $0.6278 is not likely to continue any time soon. In other words, mainly lateral movement is anticipated within the chart's boundaries or $0.6100 to $0.6278 for each New Zealand dollar.   Relevance up to 08:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328557

The New Zealand dollar has extended its gains on Wednesday. In the North American session, NZD/USD is trading at 0.6235, up 0.54%. Business Confidence slides New Zealand’s ANZ Business Confidence has been in a deep freeze for months, but things got even uglier in November, with a reading of -57.1. This followed the -42.7 reading in October and missed the consensus of -39.5. The plunge in business optimism comes despite an improvement in the economy and the easing of Covid restrictions. It has been much the same story with consumer confidence, which remains weak. The double-barreled punch of high inflation and rising interest rates has dampened the moods of consumers and businesses, and with inflation running at a 7.2% clip, the Reserve Bank of New Zealand will have little choice but to continue raising rates into 2023. Read next: On Friday greenback and Loonie may be fluctuating| FXMAG.COM The Federal Reserve remains in the spotlight, and Fed Chair Powell will be under close scrutiny when he delivers a speech today at the Brookings Institute in Washington. The fact that Powell’s remarks are the center of attention is an indication of just how dependent market movement has become on rate policy. Powell is expected to discuss inflation, which has been losing steam, but the Fed is still not ready to say inflation has peaked. Inflation may have fallen to 7.7%, but as Fed member John Williams warned earlier this week, inflation remains “far too high”. Investors are gearing for the tightening cycle to continue into 2023, but there’s uncertainty, likely shared by Fed members, as to when the rate hikes will end. The most likely scenario is that the Fed will raise rates to about 5%, but inflation, which has been stickier than the Fed expected, will have to cooperate in order for the Fed to wind up the current tightening cycle. NZD/USD Technical NZD/USD is testing resistance at 0.6209. Above, there is resistance at 0.6331 There is support at 0.6130 and 0.6008   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZD rises despite soft bus. confidence - MarketPulseMarketPulse

Summary:  Fed Chair Powell signaled the moderation of the tightening pace could start as soon as December and the terminal Fed Fund rate would be “somewhat higher” than the FOMC’s September projections. His tone was overall less hawkish than feared. S&P 500 rose to its two-month high and Hong Kong’s Hang Seng had its best month since 1998. Bond prices surged with the 10-year treasury yield falling to 3.61%. Crude oil and commodity currencies gained. What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) surged on Powell’s speech and signs of China relaxing Covid-19 restrictions Fed Chair Powell signaled that the Fed would start to moderate the pace of rate hikes as soon as December and the terminal rate might just be “somewhat higher” than the September FOMC’s projections. The less-than-feared comments stirred up another round of risk-on buying in equities. The sentiment was also bolstered by more signs coming out of China on the country’s course to ease Covid restrictions gradually despite the recent outbreaks. The S&P 500 rose by 3.1% to a two-month high. All sectors within the S&P 500, led by information technology and communication services, each rising by around 5%. Nasdaq 100 surged 4.6% to 12,030. The Dow Jones Index rose 2.2% and was said to have technically entered a bull market, after rising more than 20% from is September closing low. US treasuries (TLT:xnas, IEF:xnas, SHY:xnas) rallied on the lack of new hawkishness in Powell’s speech Yields edged up a few basis points after a mixed bag of data in the morning until Fed Chair Powell’s speech hit the wire in the New York afternoon, seeing yields reversing and yields of the 2-year up to the 5-year tumbling by more than 15bps almost immediately from the intra-day highs. The 5-year performed the best and finished the day 19bps richer at 3.74%. The 2-year yield dropped 16bps to 4.31% and the 10-year yield was 14bps lower to settle at 3.61%.  Powell reiterated his well-telegraphed higher-for-longer message but did not add additional hawkish pushback as some feared. He said that it makes sense to moderate the pace of rate increases as the Fed “approach[es] the level of restraint that will be sufficient to bring inflation down. The time for moderating the pace of rate increases may come as soon as the December meeting”. Further, his remark of terminal rate being “somewhat higher” than the Fed’s September projection was less hawkish than feared. Australia’s ASX200 (ASXSP200.1) about 3% away from its record high The Aussie market is up 12% from its October low, with commodities back in focus and rallying after the Fed signals a possibly smaller pace of rate hikes ahead. That has pressured the US dollar, with the US dollar index now down 5.4% from its peak, and that’s supported commodity prices higher, plus, as above, there is forward looking optimism on China. Locally, equites also appear supported in Australia as monthly inflation data came out weaker than expected yesterday, which supports the RBA remaining dovish and likely only hiking by 25bps (0.25%) next week. However, the important inflation read (quarterly CPI) is due early next year, which will be a more accurate reflection of price rises, and will likely show inflation in Australia is more sticky than monthly inflation read alluded to. Also consider if the best performers of late (who are all commodity companies) can continue to build momentum if stimulus continues in China’s property sector. In November, copper-gold company Sandfire (SFR) rose 45%, energy business Origin Energy gained 41% while Australia’s fourth biggest iron ore company, Champion Iron (CIA) rose 35%, with Nickel company Nickel Industries (NIC) following up 33%. So, it’s clear to say we are watching commodity companies closely as we believe the world will still struggle with the lack of tangible supply. Hong Kong’s Hang Seng (HIZ2) gained on the removal of lockdown in four Guangzhou districts Hong Kong stocks surged on Wednesday afternoon after Guangzhou lifted the lockdown in four districts even when the number of new cases was still rising in the city. Hang Seng Index climbed 2.2% with consumer discretionary, consumer staples, and industrials rising the most. In the consumer space, food and beverage names surged, with Haidilao (06862:xhkg) up 15.5% and Xiabuxiabu Catering (00520:xhkg) up 10.9%. Bilibili (09626:xhkg) jumped nearly 17% on the earnings beat. The three Chinese airlines listed in Hong Kong gained around 5% each on reopening optimism. The share prices of automakers jumped 4% to 11% on speculation for an extension of purchase tax credits for petrol vehicles. EV maker XPeng (09868:xhkg) surged 16% ahead of earnings. Another EV maker, Li Auto (02015) surged 8.9%. Hang Seng finished November up more than 26%.  It was the best monthly performance since October 1998 at the end of the Asian financial crisis. After Hong Kong market closed, XPeng reported Q3 results, missing analyst estimates but the share price of its ADRs jumped 46%. In A shares, CSI 300 was flat with auto names outperforming. FX: NZDUSD broke above 0.63, USDJPY below 137.50 Lower yields drove the US dollar lower after Powell’s speech lacked any hints of keeping the door open for 75bps in December or laying out a path for rate hikes through the course of 2023. The Euro was supported by Powell's dovish speech taking EUR/USD back above 1.04, but lacked conviction as hawkish ECB bets also retreated after a softer Eurozone CPI for November. The biggest gainers were NOK and NZD, and NZDUSD broke above the pivotal 0.63 which is the 200dma. USDJPY heading lower for a test of 137 with 200dma next in sight at 134.50. Crude oil (CLZ2 & LCOF3) higher on weaker USD and lower US inventories Crude oil markets extended recent gains amid signs of strong demand. US crude oil inventories fell by 12.6mbbl last week, the biggest decline since June 2019, according to EIA data. Meanwhile, Chinese authorities announced relaxation of Zero Covid policies in Guangzhou despite worsening Covid outbreak, signalling a better demand outlook as well. The lack of escalation in Powell’s speech also turned the dollar lower. WTI futures rose to $81/barrel while Brent futures rose above $85. The focus is now shifting to the weekend OPEC meeting, with some expecting a cut while others suggest a rollover of the current deal is more likely. Breakout in Silver (XAGUSD), Gold (XAUUSD) up as well Silver broke above the key 22 level to its highest levels since May this year as Powell signalled that the pace of interest rate hikes will slow in December. Gold edged higher as well and finished the month up over 8%, the biggest gains since July 2020. Next key levels to watch in Gold will be the 200dma and key level at 1808 while Silver may likely be heading to the 0.618 retracement at 23.35.   What to consider? Jerome Powell sticks to the script Fed Chair Powell repeated his comments from the November FOMC and what we have heard more generally from the Fed speakers over the course of the month. He said it makes sense to moderate the pace of interest rate hikes and the time to moderate the pace of hikes may come as soon as December, while he added it seems likely that rates must ultimately go somewhat higher than what was thought in the September SEPs. Powell also said they have made substantial progress towards sufficiently restrictive policy but have more ground to cover and they will likely need to hold policy at a restrictive level for some time. While his comments still tilted towards the hawkish side but there was no escalation that the markets had hoped for. His comment that he does not want to over-tighten but cutting rates is not something to do soon was a slight contrast to his earlier acceptance that risk of tightening less is greater that the risk over-tightening. Fed's Cook (voter) also said it is prudent for the Fed to hike in smaller steps as it moves forward and how far the Fed goes with hikes depends on how the economy responds, overall sticking to the consensus. US economic data broadly weaker, focus now on PCE prices and ISM manufacturing The private ADP jobs report showed US payrolls rose 127,000 this month, the slowest pace in nearly two years, as wage gains moderated. Job openings also fell in October to 10.334mln from September's 10.687mln, reversing a surprise jump in the prior month but still remaining elevated, according to the JOLTS report. The biggest downside surprise came in Chicago PMI for November which came in at 37.2 against an expected 47.0, falling from a prior 45.2. While monthly surveys can be noisy, but this one is now flirting with pandemic lows and puts the focus on ISM manufacturing due today. The only ray of positive news came from the Q3 GDP release which was upwardly revised by to 2.9% from 2.6% previously. Softer EU CPI weakens hawkish ECB bets Euro inflation slowed for the first time in 1.5 years to 10% in November from 10.6% YoY in October. ECB officials have highlighted the data will be key for their next rate decision, suggesting lower chance of another 75bps rate hike at the December 15 meeting. Still, it remains hard to say that inflation in the Eurozone has peaked. ECB members also remain broadly hawkish and suggest that the commitment to bring inflation back to target will stay. Guangzhou lifted the lockdown of several districts as a sign of easing restrictions even as new cases at elevated levels Guangzhou, the third largest city in China and the capital of the southern province of Guangdong, removed the “temporary control areas” restrictions of several districts even though the city’s daily new cases of Covid-19 stayed at nearly 7,000. It was an encouraging sign pointing to China’s willingness to continue the fine-tuning measures that it had recently started despite the surge in new cases across the country. Speaking at a pandemic control policy workshop, Vice Premier Sun Chunlian emphasized the importance of gradually fine-tuning the pandemic control measures in response to the lower fatality of the Omicron, higher vaccination rate, and the accumulation of experience in containing the spread of the virus. Equities in focus that could benefit from rate hikes not being as aggressive, and from the festive season spending It’s the world’s first festive season not in lockdown (excluding China), so we are watching retailer shares given they will likely benefit from retail shopping rising. It’s worth watching travel and tourism companies with the market forward looking and seeing that travel-services revenue could likely continue to gain momentum. Carnival shares are up 44% from October with the company seeing some of its strongest sales since pre-covid, Royal Caribbean shares are up 83% from July. We are also watching other travel affiliated companies do well, like Boeing, which is up 48% from September, as well as airlines, such as Singapore Airlines, Qantas, Air New Zealand. However, we think although the travel and tourism sector, especially airlines, will likely see a pick-up in sales amid the seasonality, we wonder if airlines will be able to extend their share price rally into 2023 as fuel costs are not expected offer respite into 2023. This means, those larger companies or those with a wide moat, might be more in focus, as they will be more likely able to sustain the costs pressures.   For our look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Market Insights Today: Powell’s lack of new hawkishness; Guangzhou restrictions eased – 1 December 2022 | Saxo Group (home.saxo)

NZD/USD has refreshed its three-month high at 0.6335 on upbeat market sentiment. The speech from Jerome Powell confirmed the termination of a 75 bps rate hike spell in December meeting. New Zealand Dollar has picked strength on upbeat Caixin Manufacturing PMI and the reopening of the Chinese economy. NZD/USD is expected to smash 0.6350 as the US Dollar is seeing more downside on policy moderation fears. NZD/USD is marching north firmly after shifting its auction profile above the round-level resistance of 0.6300 in the Asian session. The kiwi asset has refreshed its three-month high at 0.6335 as the New Zealand Dollar has been strengthened by a surprise rise in Caixin Manufacturing PMI data and a significant improvement in investors’ risk appetite post-Federal Reserve (Fed)’s commentary. Fed Powell’s promise to moderate the extreme-tight monetary policy in the December meeting has infused fresh blood into risk-sensitive assets. S&P500 futures are gathering momentum adding more upside to Wednesday’s gains. The US Dollar Index (DXY) has surrendered its short-lived recovery attempt and is on the verge of refreshing its day’s low below 105.50. Meanwhile, the 10-year US Treasury yields have slipped again to 3.60% amid healthy demand for US government bonds by investors. Federal Reserve’s Powell is set to terminate the 75 bps rate hike culture The commentary from Fed chair Jerome Powell has confirmed that the central bank is looking to slow down its interest rate hike pace. Catalysts that have compelled Fed Chair to sound less hawkish while providing interest rate guidance for December’s monetary policy meeting are a slowdown in labor demand, a decline in economic activities, and a soft October inflation report. The Federal Reserve is bound to bring price stability to the United States economy but not at the cost of the economy. Fed Chair in his speech cited that it is not appropriate to ‘Crash the economy and clean it afterward’. This has confirmed that the Federal Reserve (Fed) won’t continue the 75 basis points (bps) rate hike spell now and may shift to a lower rate hike to 50 bps. As per the CME FedWatch tool, the chances of a 50 bps rate hike announcement by the Fed in the December meeting holds around 80%. US Dollar to remain volatile ahead of Nonfarm Payrolls Another critical trigger that is going to keep US Dollar bulls on the tenterhooks in the United States Nonfarm Payrolls (NFP) data, which will release on Friday. As per the consensus, the United States economy added 200K jobs in November, lower than the prior release of 261K. Cues from US Automatic Data Processing (ADP) Employment data indicate that the additional payrolls in November are merely 127K. The Unemployment Rate is seen unchanged at 3.7%. Apart from that, investors will keep an eye on Average Hourly Earnings data. The street is expecting that the next trigger that could create troubles for the Federal Reserve is rising wage prices. Wage inflation carries the capability of driving price inflation higher. Post a slowdown in inflation led by accelerating interest rates, the United States households will remain with higher earnings that could trigger retail demand. Upbeat Caixin Manufacturing PMI drove New Zealand Dollar In early Tokyo, IHS Markit reported a surprise rise in Caixin Manufacturing data. The economic data was released at 49.4 for November month vs. 48.9 as projected and October’s release of 49.2. Despite extreme lockdown measures in November by Chinese authorities to contain the COVID-19 epidemic, the economy has managed to display better-than-projected performance. This has strengthened the kiwi asset significantly as New Zealand is one of the leading trading partners of China. Meanwhile, signs of the gradual opening of the Chinese economy led by relaxations in zero Covid-19 policy to return economic prospects on track have also strengthened the New Zealand Dollar. NZD/USD technical outlook NZD/USD has comfortably established above the 200-period Exponential Moving Average (EMA) at around 0.6200, which indicates that the long-term trend has turned bullish. Also, a bull cross, represented by the 20-and 50-EMAs at 0.5871, indicates a continuation of the upside. Going forward, the ultimate resistance is placed from August 12 high at 0.6470. Apart from that, the Relative Strength Index (RSI) (14) is oscillating in a bullish range of 60.00-80.00, which indicates that the upside momentum is intact.     search   g_translate    

Last night's speech by Jerome Powell, chairman of the US Federal Reserve, was one of the key events of the day. Investors were expecting clues about further changes in US interest rates, and they got them. Powell sounded more dovish. During his speech at the Brookings Institute, Jerome Powell signaled that the Fed may slow the pace of interest rate hikes in December, "the time for a moderate pace of rate hikes may come as early as the December meeting," - Powell said, while adding that it is likely "that restoring price stability will require maintaining policy at restrictive levels for some time." In addition, Powell added that historically premature policy easing has been strongly discouraged. "We will stay the course until the job is done," he said. - he concluded. Federal Reserve Chairman Jerome Powell also said that he "doesn't want to over-tighten" interest rates, as the central bank doesn't see fit to "crash the economy and clean up after it." Nevertheless, answering questions at a session organized by the Brookings Institute, Powell stressed that "cutting rates is not something I want to do anytime soon," the BBN service concludes. This was the Fed chairman's last public appearance before the December interest rate decision. Source: Conotoxia MT5, USDIndex, Daily Markets in a little euphoria The U.S. Nasdaq index hit its highest level in 10 weeks yesterday, the AUD/USD pair rate hit its highest level in 11 weeks, NZD/USD rose to levels seen 2.5 months ago, gold reached its highest level in 2 weeks, and the dollar index fell in November in percentage terms by the strongest amount since 2010. This reaction of the markets seems to show quite well how high investors' hopes were placed on Powell's speech, and that they were not disappointed. In addition to Powell's speech, events from China may also provide support for the markets. Investors may be pleased with China's softening stance on Covid. The top official in charge of tight restrictions on the Covid outbreak said the country's fight against the virus is entering a new phase amid a waning omicron variant, rising vaccination rates and broader experience in preventing Covid. Source: Conotoxia MT5, US100, H4 What's next ahead? After the Fed chairman's speech, it seems that the key for the markets may be Friday and data from the US labor market. It is in it that high hopes may be placed to resist the economic slowdown. However, if the labor market situation began to deteriorate as well, the Fed could face a difficult choice. Which to fight? With inflation or with the deterioration in US employment. That is what we will find out tomorrow. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

NZD/USD gains traction for the fourth successive day amid the prevalent USD selling bias. The Fed’s dovish pivot keeps the US bond yields depressed and weighs on the greenback. The cautious market mood could cap the risk-sensitive Kiwi ahead of the US NFP report. The NZD/USD pair attracts fresh buying on the last day of the week and maintains its bid tone through the early European session. This marks the fourth straight day of a positive move and lifts spot prices closer to the highest level since mid-August touched on Thursday. Bulls now await a sustained strength beyond the 0.6400 mark amid the prevalent US Dollar selling bias.y The USD Index, which measures the greenback's performance against a basket of currencies, languishes near a multi-month low amid the recent dovish signals from the Federal Reserve officials. In fact, Fed Chair Jerome Powell sent a clear message on Wednesday that the US central bank will soften its stance and said that it was time to slow the pace of interest rate hikes. Apart from this, signs of easing inflationary pressure and sluggish US Treasury bond yields continue to weigh on the greenback. On Thursday, the US Bureau of Economic Analysis reported that the Personal Consumption Expenditures (PCE) Price Index slowed to 6% YoY in October from 6.3% previous. Adding to this, the annual Core PCE Price Index, the Fed's preferred gauge of inflation, edged down to 5% from 5.2% as expected. The softer data dragged the yield on the benchmark 10-year US government to a nearly two-month low. That said, the cautious mood could limit losses for the safe-haven USD and cap the risk-sensitive Kiwi. Furthermore, traders also seem reluctant to place aggressive bets and prefer to move to the sidelines ahead of the closely-watched US monthly employment details. The popularly known NFP report, due later during the early North American session, will influence the near-term USD price dynamics. Apart from this, the broader risk sentiment should provide a fresh impetus to the NZD/USD pair. Nevertheless, spot prices remain on track to register gains for the seventh successive week.  

Both the Chinese Renminbi as well as the Pacific G10 currencies (AUD and NZD) are benefitting quite clearly from the fact that several cities in China decided to ease coronavirus curbs. Nonetheless, excessive AUD and NZD are not justified, according to economists at Commerzbank. China’s leadership is reacting “Corona measures are being eased more quickly than one might have assumed even last week. In particular as the introduction of these measures had initially caused CNY, AUD and NZD weakness the FX market had potential for a correction. I completely agree with that, in particular as I was critical about the initial market reaction. At the same time, I caution against throwing out the baby with the bath water.” “I know that everyone blamed the corona lockdowns (and fears of them) for weak growth in China. However, even if we see a reversal in China’s lockdown policy that does not mean that everything will be happiness ever after. That means that excessive AUD and NZD strength is not justified.”

NZD/USD fails to preserve its modest intraday gains amid some follow-through USD buying. Bets that the Fed will continue to raise interest rates offer some support to the greenback. The optimism over the easing of restrictions in China limits losses for the risk-sensitive Kiwi. The NZD/USD pair attracts some intraday selling near the 0.6355 area on Tuesday and drops to the lower end of its daily range during the early European session. The pair is currently trading around the 0.6300 mark, which if broken decisively will set the stage for an extension of the overnight sharp pullback from the highest level since mid-August. The US Dollar gains some positive traction and looks to build on the overnight solid recovery move from over a five-month low, which, in turn, acts as a headwind for the NZD/USD pair. Against the backdrop of Friday's upbeat US monthly jobs report, the stronger US ISM Services PMI print on Monday suggested that the economy remained resilient despite rising borrowing costs. This fueled speculations that the Fed may lift interest rates more than projected and is seen as a key factor acting as a tailwind for the greenback. Market participants, however, seem convinced that the US central bank could scale back the pace of its rate-hiking cycle and have been pricing in a relatively smaller 50 bps lift-off in December. Apart from this, the latest optimism over the easing of COVID-19 curbs in China keeps a lid on the safe-haven buck and helps limit the downside for the NZD/USD pair, at least for the time being. The mixed fundamental backdrop warrants some caution for aggressive bearish traders and before confirming that the major has topped out. Tuesday's relatively thin US economic docket, featuring the release of Trade Balance data, might do little to provide any impetus to the NZD/USD pair. That said, the US Treasury bond yields, along with the market risk sentiment, could influence the USD price dynamics and produce short-term opportunities around the major.

NZD/USD remains sidelined as sellers attack short-term key support line. Bearish MACD signals, RSI divergence keeps sellers hopeful. 21-SMA guards immediate recovery, 0.6470-75 region is the key hurdle to the north. NZD/USD treads waters around 0.6320-30 as bears flirt with the short-term key support line during early Wednesday. Even so, the Kiwi pair’s failure to cross the 21-SMA and bearish MACD signals hint at the quote’s further downside. Also keeping sellers hopeful is the bearish RSI divergence on the chart. The oscillator-price divergence could be witnessed when the NZD/USD prints higher lows but the RSI, placed at 14, fails to print the commensurate bottoms, which in turn suggests the lack of momentum strength even if the prices remain firmer. As a result, the bearish move could quickly be materialized at the first chance. That said, an upward-sloping support line from November 10, near 0.6315, gains major attention as a downside break of the same might work as a trigger for the NZD/USD south-run. In that case, lows marked on November 28 and 17, respectively near 0.6155 and 0.6065, could lure the bears before highlighting the previous monthly low of 0.5740. On the flip side, a clear break of the 21-SMA level surrounding 0.6360 appears necessary to convince NZD/USD buyers. Even so, multiple hurdles surrounding 0.6470-75, comprising the highs marked in August and December, appear a tough nut to crack for the bulls before retaking control. NZD/USD: Four-hour chart Trend: Further weakness expected

NZD/USD retreats towards 50-HMA, snaps two-day winning streak. Bearish MACD signals, weekly resistance line keep sellers hopeful Convergence of 200-HMA, ascending trend line from late November challenge further downside. Bulls need validation from 0.6470-75 to refresh yearly top. NZD/USD remains mildly offered around 0.6350 heading into Thursday’s European session. In doing so, the Kiwi pair struggles to extend the day-start bounce off the 50-Hour Moving Average (HMA) while defending the one-week-old bearish trend, as shown by the descending trend line. Also supporting the downside bias are the bearish MACD signals. That said, a clear downside break of the 50-HMA, around 0.6335 by the press time, holds the key to the NZD/USD pair’s short-term downside. Even so, the 200-HMA and an upward-sloping trend line from November 28, close to 0.6300, appears a tough nut to crack for the Kiwi pair sellers. Following that, a slump towards the late November swing low near 0.6155 can’t be ruled out. Meanwhile, recovery moves need not only cross the weekly resistance line, around 0.6365 at the latest, but should also cross the monthly high surrounding 0.6475 to lure the NZD/USD bulls. It’s worth noting that the August month’s peak near 0.6470 adds strength to the 0.6470-75 resistance area. During the quote's sustained trading beyond 0.6475, the 61.8% Fibonacci Expansion (FE) of the pair's moves from November 28 to December 05, close to 0.6510, will be on the NZD/USD buyer's radar. Overall, NZD/USD is likely to remain weak for the short term and the sellers can regain control on a successful break of 0.6300. NZD/USD: Hourly chart Trend: Limited downside expected

The New Zealand dollar is slightly higher on Thursday. In the North American session, NZD/USD is trading at 0.6376, up 0.34%. New Zealand manufacturing in trouble New Zealand’s manufacturing sector is showing signs of strain, as high costs and hiring challenges in a tight labour market remain key problems. Manufacturing PMI contracted in October, for the first time since August 2021, dropping from 51.7 to 49.3. We’ll get a look at the November report next week. Manufacturing Sales slipped 4.9% in Q2, and third-quarter data will be released on Friday. Another decline is expected, with a consensus of -2.4%. The Reserve Bank of New Zealand remains in hawkish mode and hiked by 75 bp at its last meeting, bringing the cash rate to 4.25%. The RBNZ considered a full-point increase, which is indicative of how seriously policy makers view the threat of high inflation, which has hit 7.2%. Read next: Amazon, Google, Microsoft And Oracle Received A Cloud Deal From The Pentagon| FXMAG.COM The RBNZ now has a long break until the next meeting on February 22nd, which will give it plenty of time to gauge the effect of its steep tightening on the domestic economy. The Federal Reserve will hold two more meetings before then – one on December 14th and one on February 10th. The markets have priced in a 50-bp increase at next week’s meeting, which takes place just a day after the November inflation report. With the Fed’s focus on inflation, recent CPI reports have been major market movers for the US dollar, and I expect the same from next week’s report. Investors will also be keeping a close eye on Friday’s inflation data out of the US – the Producers Price Index and UoM inflation expectations. NZD/USD Technical NZD/USD faces resistance at 0.6497 and 0.6585 There is support at 0.6327 and 0.6239   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZD/USD extends gains ahead of Mfg. Sales - MarketPulseMarketPulse

NZD/USD gains traction for the fourth straight day on Friday amid the prevalent USD selling bias. Bets for less aggressive Fed rate hikes keep the US bond yields depressed and weigh on the buck. A positive risk tone further undermines the safe-haven buck and benefits the risk-sensitive Kiwi. The NZD/USD pair edges higher for the fourth successive day on Friday and climbs back closer to the top end of its weekly trading range. The pair sticks to its modest gains through the early European session and is currently placed around the 0.6400 round-figure mark. A combination of factors drags the US Dollar closer to a multi-month low set earlier this week, which, in turn, is seen acting as a tailwind for the NZD/USD pair. Rising bets for a less aggressive policy tightening by the Fed, along with a generally positive risk tone, continue to weigh on the safe-haven greenback. The markets seem convinced that the US central bank will slow the pace of its rate-hiking cycle and have been pricing in a relatively smaller 50 bps lift-off in December. Furthermore, the optimism over the easing of strict COVID-19 restrictions in China remains supportive of a recovery in the global risk sentiment. That said, the incoming positive US economic data fuels speculations that the US central bank might lift rates more than projected, which should limit losses for the USD. Moreover, worries about a deeper global economic downturn might further contribute to capping the upside for the growth-sensitive New Zealand Dollar. Traders might also refrain from placing fresh bets ahead of next week's key data/event risks - the US consumer inflation figures and the FOMC meeting. The crucial US CPI report will influence the Fed's policy outlook, which, in turn, will drive the USD and provide a fresh directional impetus to the NZD/USD pair. Hence, it remains to be seen if bulls are able to retain control or if the intraday move-up runs out of steam at higher levels. Nevertheless, the NZD/USD pair has reversed modest weekly losses and remains well within the striking distance of its highest level since mid-August, around the 0.6440-0.6445 area touched on Monday. Market participants now look to the US economic docket, featuring the release of the Producer Price Index (PPI) and the Prelim Michigan Consumer Sentiment Index. This, along with the risk sentiment, could provide some impetus and allow traders to grab short-term opportunities around the NZD/USD pair on the last day of the week.

The Kiwi ended the week back above 0.64, and while it didn’t reclaim Monday’s highs, it’s still the best-performing G10 currency month to date. Economists at ANZ Bank expect volatility this week. NZD seasonality is usually positive in December “NZD seasonality is usually positive in December, but while it has that and higher interest rates in its corner, there are no guarantees that it will finish this week un-bruised, with several central bank meetings due.” “Volatility beckons ahead of the Fed meeting, which is expected to be hawkish, with a 50 bps hike and a much higher terminal rate (2023) ‘dot plot’. Our chief concern is what this might do to the USD, which has come under pressure as the trendy ‘pivot’ narrative has taken hold, despite clear signs of sticky US inflation.” “NZ factors will also play a role, with the HYEFU and GDP due this week, but they’re likely to play second fiddle to volatility and the global vibe (again!).”  

NZD/USD slipped below the 0.64 mark. Economists at ANZ Bank expect a degree of treading water ahead of US Consumer Price Index (CPI) data. It makes sense to brace for volatility “Today is likely to see similar whippy price action ahead of US CPI, which is the first big event of the week. This will be the final data point ahead of Thursday’s Fed meeting, which we think will be hawkish and arguably poses the greatest risk to the Kiwi (in terms of its potential to drive an upside correction in the USD DXY).”  “We think it makes sense to brace for volatility.” See – US CPI Preview: Forecasts from 10 major banks, inflation appears to have peaked

Tensions over what signals the Fed will show are rising due to a recent article that said officials are divided on how long rates should increase. According to the note, some expect a steady decline in inflation in the coming months, so the rate hike should be stopped as soon as possible. Others, however, fear that inflation will not fall adequately next year, so they call for rates to be raised further, or at least held high longer. The US inflation report for November will be published today, but so far businesses are not yet seeing any threats of higher inflation. In fact, yields on 5-year TIPS bonds have been falling since March 2022. Another increase in inflation will cause another uncertainty to the economy, which will ramp up demand for dollar, while reducing risk appetite. NZD/USD A further rise in government spending is likely to increase the risk of tougher policy in New Zealand. This means that interest rates could be raised above forecast, which the RBNZ estimates is at 5.5%, while the ANZ bank sees 5.75%. If that happens, the country will fall into recession much faster than expected, but bond yields will be higher, which would strengthen expectations of a yield spread. Positioning on NZD continues to be bearish, but the performance is still minimal and close to neutral. Net short positions increased by 97m to -411m during the week, however, the estimated price shows no intention to turn downwards yet, which means that the direction of capital flows is more inclined to a rise. NZD/USD is trading in a narrow range, near the resistance level of 0.6460/80. Bulls do not have enough strength to trigger a breakout, but it could hit 0.6240/50 as long as the Fed shows a more hawkish view on its monetary policy. AUD/USD Business confidence turned negative in November, falling below zero for the first time since November 2021. Fortunately, conditions remained fairly high at +20p. But with activity persisting, there is little sign of any reversal in inflation. Cost growth remained largely unchanged at elevated levels on both the labor and input costs, while retail prices continued to rise at a rapid pace. Overall, there is growing concern that the strength of the economy will converge in 2023. This indicates that companies are becoming increasingly pessimistic due to the slowdown in global economy, weaker consumption, rising inflation and higher rates that are lowering real household incomes. That is why it was not a surprise that net short positions in AUD declined by 272 million to -2.713 billion during the week. Bearish performance persists, but the medium-term trend is in AUD's favor. The settlement price is above the long-term average, pointing upwards, which suggests that attempts to go higher will continue. Even so, AUD has shown the weakest momentum among the G10 currencies over the past week due to both volatility in the Fed's monetary policy outlook and growing worries over whether China is willing to cut their restrictions. Hitting 0.6880 and 0.6910/30 are possible, but only if the Fed gives hawkish signals on Wednesday evening. The strength of AUD is also not enough for a sustained rise.   Relevance up to 07:00 2022-12-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329635

NZD/USD is looking for a cushion around 0.6430 as investors see a less-hawkish Fed monetary policy. The decline in US inflation is backed by a significant drop in gasoline prices, used cars, and airline fares. Going forward, a mixed response is expected from New Zealand GDP data. The NZD/USD pair has turned sideways around 0.6430 after a gradual correction from Tuesday’s high above 0.6500. The Kiwi asset is seeking a cushion as the overall market is still bullish. Anxiety ahead of the Federal Reserve (Fed) policy has seldom impacted the risk-sensitive currencies in the Tokyo session. The US Dollar index (DXY) is displaying a lackluster performance as investors are awaiting the Fed’s interest rate announcement for making informed decisions. The USD Index is auctioning above 104.10 amid a quiet market mood. Sheer volatility is expected in the US Dollar as the Fed is expected to adopt a less-hawkish sound while dictating the last monetary policy of CY2022. The 10-year US Treasury yields are continuously oscillating below 3.50% after a decline in the United States Consumer Price Index (CPI) consecutively for the second month. The decline in US inflation is backed by a significant drop in gasoline prices, used cars, and airline fares. Analysts at RBC Capital Markets see the Fed raising the Fed Funds rate by 50 basis points (bps) on Wednesday and they then pointed out that the more encouraging inflation signs make a pause in early 2023 more likely. On the New Zealand front, investors are awaiting the release of the Gross Domestic Product (GDP) data, which will release on Thursday. As per the consensus, the quarterly GDP data for the third quarter is seen lower at 0.9% vs. the prior release of 1.7%. While the annual GDP is expected to expand sharply by 5.5% against the former release of 0.4%. In the Half Year Economic and Fiscal Update, the New Zealand Treasury has forecasted three-quarters of a shrinking economy starting in the second quarter of 2023.  

Federal Reserve expected to hike by 50 bp All eyes are on the Federal Reserve, which winds up its policy meeting later today. Policy makers are expected to raise rates by 50 basis points at this final meeting of 2022, with an outside chance of a more aggressive 75 basis point hike. This year has set a record for tightening, but despite that, the Fed stills finds itself in an uphill battle to convince the markets that it remains in a hawkish mode. The dramatic inflation report on Tuesday was softer than expected at 7.1%, once again raising risk appetite and sending the US dollar sharply lower. Read next: The Australian Dollar Held Above $0.68, Today The Fed Will Make Its Last Decision Of The Year| FXMAG.COM Any drop in inflation is welcome news for the Fed, but let’s not forget that inflation is still more than three times the Fed target of 2%. The Fed has reiterated that it is committed to curbing inflation and has not given any indications of winding up the current tightening cycle, stating that it expects the terminal rate to be “somewhat higher” than anticipated in September. Despite this, speculation is growing that the Fed might deliver one more rate hike in February, perhaps by 25 bp, and then call it quits. New Zealand releases fourth-quarter GDP later today, and the markets are bracing for a weak gain of 0.8% q/q. This follows the 1.2% gain in Q3, as the economy was boosted by the booming tourist trade as the border reopened. The New Zealand dollar has recovered nicely, gaining about 400 points against the US dollar since October 1st. The Reserve Bank of New Zealand will be on a long break, as the next policy meeting is not until February 22nd. We could see some volatility from NZD/USD in today’s North American session, with the Fed rate announcement and the New  Zealand GDP release. NZD/USD Technical 0.6472 is a weak resistance line. Above, there is resistance at 0.6591 There is support at 0.6388 and 0.6311 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZD/USD awaits Fed, GDP - MarketPulseMarketPulse

NZD/USD seesaws between tepid gains/minor losses through the early European session. A hawkish assessment of the Fed’s decision revives the USD demand and caps the upside. The disappointing Chinese macro data further contribute to the modest intraday pullback. Depressed US bond yields keep a lid on the USD recovery and should help limit the slide. The NZD/USD pair struggles to capitalize on its modest intraday uptick and attracts some sellers near the 0.6465 region on Thursday. The pair retreats to the lower end of its daily range during the early European session and is currently trading around the 0.6435-0.6430 area. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM The US Dollar stages a modest recovery from its lowest level since mid-June amid a hawkish assessment of the Federal Reserve's policy decision on Wednesday and acts as a headwind for the NZD/USD pair. The US central bank delivered a widely anticipated 50 bps rate hike on Wednesday and signalled that it will continue to raise rates to crush inflation. The so-called dot plot projected at least an additional 75 bps increases in borrowing costs by the end of 2023 and the terminal rate rising to 5.1%, up from the 4.6% forecasted in September. Adding to this, the US central bank expects that it will take longer to get to the 2% inflation goal. Furthermore, Fed Chair Jerome Powell, during the post-meeting press conference, said that more data was needed before the central bank would meaningfully change its view of inflation. This, in turn, offers some support to the buck, which, along with disappointing Chinese macro data, prompts selling around the resources-linked Kiwi. The NZD/USD pair, however, remains well within the overnight range, warranting caution for bearish traders. Investors seem convinced that the Federal Reserve will soon have to pivot from an ultra-hawkish stance to something more neutral. This, in turn, is keeping the US Treasury bond yields depressed and holding back the USD bulls from placing aggressive bets. Apart from this, a positive risk tone helps limit the downside for the NZD/USD pair, at least for now. Traders now look to the US macro data - Retail Sales, the Philly Fed Manufacturing Index and Weekly Initial Jobless Claims - for some impetus later during the early North American session. Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM

NZD/USD has sensed selling pressure while stretching its recovery above 0.6370 amid broader pessimism. The Federal Reserve is considering wage inflation a major trigger that could propel general inflation. The New Zealand Dollar is going to display reflexive moves on the People’s Bank of China monetary policy. NZD/USD has retreated after testing the upward-sloping trendline while the downside filters are still solid. NZD/USD has faced resistance of around 0.6380 in the early European session. The New Zealand Dollar major asset delivered a recovery after dropping to near 0.6320 and stretched its recovery in the Tokyo session as the risk-off impulse witnessed ease. However, the aversion theme is extremely solid on a broader note. The recovery move in the Tokyo session should not be considered a reversal for now as it needs more filters. Meanwhile, the US Dollar Index (DXY) is displaying a subdued performance amid the absence of a potential trigger ahead. The USD Index is oscillating around 104.35 after correcting from above 104.80. S&P500 futures are extending Thursday’s sell-off as firms in the United States are having the trauma of higher interest obligations led by escalated terminal rate guidance. The 10-year US Treasury yields have attempted recovery and have surpassed 3.48% as the demand for US government bonds has fizzled out. On the New Zealand front, investors are shifting their focus toward the interest rate decision by the People’s Bank of China (PBoC), which is scheduled for Tuesday. The New Zealand Dollar may display significant volatility, being one of the leading trading partners of China. Federal Reserve sees wage inflation as a major threat ahead Average Hourly Earnings in the United States are continuously advancing to justify tight labor demand. Firms spend a significant amount in retaining and hiring talent to maintain a comfortable flow of operational activities. Higher earnings by the households will continue to keep retail demand solid as individuals will be left with decent funds after catering necessities. Rising wage inflation could propel general inflation ahead as lower inflation can be achieved with a higher unemployment rate. Escalating payroll numbers and eventually robust retail demand would keep inflation on the rooftop. United States Retail Sales dropped larger than predicted On Thursday, the monthly Retail Sales data (Nov) contracted by 0.3% while the street was expecting a contraction of 0.1%. A decline in retail demand would result in more inflation softening as firms will be forced to provide goods and services at lower prices. Analysts at Wells Fargo expect spending to contract in CY2023 but it's too soon to call this the start of a sustained decline in goods spending. For making lower inflation projections, the United States economy is needed to show a sustained decline in consumer spending. For further guidance, investors are keeping an eye on preliminary S&P PMI data. As per the projections, the Manufacturing PMI is seen unchanged at 47.7 while Service PMI would improve to 46.8 vs. the former release of 46.2. New Zealand Dollar banks upon PBoC policy for further guidance The central bank of the second largest economy is going to announce its monetary policy after easing prolonged Covid-19 restrictions. The People’s Bank of China is scheduled to announce its December monetary policy on Tuesday. Citing weaker economic prospects, a troubled real estate market, and contracted retail demand, the People’s Bank of China is expected to announce a dovish monetary policy. People’s Bank of China policymakers should look to trim their Prime Lending Rate (PLR) to support low inflation and deflation in factory-gate prices. A dovish policy stance by the People’s Bank of China is going to strengthen the New Zealand Dollar as the Kiwi economy will receive more business from China. NZD/USD technical outlook NZD/USD has sensed significant demand after dropping to near the upward-sloping trendline from November 21 low at 0.6087. The rebound from the aforementioned trendline needs to pass various filters for a bullish reversal consideration. A bear cross, represented by the 20-and 200-period Exponential Moving Averages (EMAs) at 0.6384, indicates more weakness ahead. The Relative Strength Index (RSI) (14) is attempting to shift into the 40.00-60.00 range. A decisive decline in the bearish range of 20.00-40.00 will trigger a bearish momentum

NZD/USD prints mild gains to keep Friday’s recovery moves between 50-SMA and 100-SMA. Impending bull cross on MACD, sustained bounce off monthly support line keep buyers hopeful. 200-SMA, monthly resistance line act as additional trading filters. NZD/USD grinds higher towards 0.6400, around 0.6385 by the press time, as buyers flirt with the 50-SMA during early Monday. In doing so, the Kiwi pair defends the previous day’s rebound from the 100-SMA, as well as the recovery moves from an upward-sloping support line from November 17. Given the impending bull cross on the MACD, as well as the quote’s repeated hesitance in breaking the 100-SMA, NZD/USD is likely to overcome the hurdle of 0.6392 level comprising the 50-SMA. Following that, the run-up could aim for the 0.6400 and the 0.6500 thresholds before the monthly resistance line, around 0.6535 at the latest, could challenge the bulls. In a case where NZD/USD manages to keep the reins past 0.6535, June’s top at around 0.6575 and the 0.6600 round figure will be in focus. Meanwhile, the 100-SMA level surrounding 0.6345 precedes the one-month-long ascending support line, mentioned previously, to restrict the immediate downside near 0.6335. It’s worth noting, however, that a downside break of the 0.6335 support could quickly drag NZD/USD prices towards the 200-SMA level surrounding 0.6200. However, any further downside appears bumpy. NZD/USD: Four-hour chart Trend: Further recovery expected

NZD/USD holds lower grounds near the intraday bottom surrounding the 0.6300 threshold as European traders flex muscles during Wednesday’s early hours. In doing so, the Kiwi pair traces the options market’s clues as the Risk Reversal (RR), calculated as the difference between call and put options, drops the most since early November 03. With the daily RR of -0.240 at the latest, the NZD/USD options market snaps consecutive four weeks of bullish signals with the latest weekly RR being negative. The reason could be linked to the US Dollar’s recovery, as well as downbeat New Zealand trade numbers for November. Additionally, mixed concerns surrounding China and anxiety over the bond market moves seem to also weigh on the NZD/USD prices. Looking forward, the US Conference Board (CB) Consumer Confidence figures for December, expected at 101.00 versus 100.00 prior, will be important to watch for fresh impulse. Additionally, headlines surrounding China, Japan and bond markets will also be crucial for clear directions. Also read: NZD/USD seesaws near 0.6350 even as New Zealand trade deficit increases  

Summary:  After Q3 GDP data revision that reminds us that the UK is in the vanguard for economies lurching into recession, sterling has lurched into a new slide and is even threatening a break down versus the euro as EURGBP tests the highs since the Truss-Kwarteng mini-budget sterling wipeout. Elsewhere, a plunge in the kiwi is likely down to position squaring and rebalancing ahead of year end after a remarkable recent run. Today's Special Edition Saxo Market Call podcast: Investors' Wish List for 2023.  FX Trading focus: Sterling stumbles after weak GDP, Kiwi longs take profit. Last important US data point of the year up today: November PCE inflation. The latest Q3 UK GDP revisions suggest the economy is weakening even more quickly than previously thought last quarter, as growth was revised down to -0.3% QoQ from -0.2% previously, and the Private Consumption figures was revised to -1.1% QoQ vs. -0.5% previously. The combination of a Bank of England that wants to soft-pedal further tightening and the promises of fiscal austerity from the Sunak-Hunt duo are a powerful negative for sterling as we look ahead into the New Year, which will likely bring relative UK economic weakness even if our thoughts that  recession fears for next year globally are over-baked for the first two and even three quarters. The FX fundamentals are entirely the opposite for the euro, as the ECB attempts a maximum hawkish stance as it recognizes the risks that the fiscal impulse can keep inflationary pressures elevated from here. The two-year yield spread is close to its highest since October of last year. Chart: EURGBPA weak GDP revision yesterday didn’t appear to be the proximate trigger for sterling’s latest lurch lower, but does remind us of the relative weakness of the UK outlook and the combination of a heel-dragging BoE (on further tightening) and austere fiscal picture could set up further declines in the weeks and months. Worth noting that the key EURGBP is pushing on the top side of the range established since the volatile days surrounding the Truss-Kwarteng mini-budget announcement. A hold above 0.8800 could lead to a test of the higher end of the range since the 2016 Brexit vote above 0.9200. A higher euro is straightforward if ECB maintains its hawkish stance as the EU fiscal impulse is far stronger from here. The wildcard for the euro side of the equation is the usual existential one of peripheral spreads and whether these stay orderly if yields resume their rise next year. Source: Saxo Group Elsewhere, the kiwi saw a sharp further run to the downside yesterday with no proximate identifiable trigger. AUDNZD traded all the way to 1.0719 before backing off to below 1.0650 at one point this morning. I suspect that this was an extension of the position squaring after a the remarkable run higher in the kiwi over the last two months, driven both by relative RBNZ hawkishness, but in particular by RBA (and arguably BoC), sparking heavy flows in AUDNZD just after the pair had traded almost to a decade high on hopes for a Chinese reopening boosting the outlook for Australia. The current reality on the ground in China is even worse than during the zero Covid tolerance days, but we know that the Arguably, recent record low consumer confidence readings in New Zealand suggest that the RBNZ will need to climb down from its hawkishness, at least in relative terms to its peers, going into next year. After an incredible slide in AUDNZD and rally in NZDCAD, I suspect we will see powerful mean reversion in the coming three months in those pairs. It feels like USD traders have checked out for this year. Hard to tell if today’s US November PCE inflation data can generate any excitement on a soft print after the soft CPI print earlier this month generated a lot of fuss that quickly faded on the very same day. A more interesting development would be a slightly hot core set of PCE core readings than expected today (the month-on-month core reading expected at +0.2% and year-on-year expected to have decelerated sharply to 4.6% from 5.0% in October. EURUSD has traded within a 100-pip range for more than a week and the 1-month implied volatility has recently plumbed lows (around 7.50%) not seen since the beginning of this year and would probably be lower still had not the Bank of Japan roiled markets this week. But the USD will have a hard time ignoring any further slide in risk sentiment to close out the year. And the beginning of the calendar year is nearly always interesting for new themes and often for demarcating key highs or lows for the year. Consider the following from the last six years of the EURUSD trading history: 2022: High for the year in EURUSD posted in February, but that high was only a few pips above the 1.1483 high water mark of January. Low for year posted in September 2021: High for the year was in January, on the third trading day of the year, low in late November 2020: Exceptional pandemic year, low for year posted in March, high in December 2019: High for quite year posted on January 10, low on October 1 2018: High for year posted in February, but highest daily close not above intraday high in January. Low posted in November 2017: Low for year in January, high in September (December high less than a figure from September high water mark) Table: FX Board of G10 and CNH trend evolution and strength.The JPY still sits with a strong positive reading, but has yet to “trend” after the huge one-day move this week – a few more days of lack of movement and questions marks would begin to flourish around its status. Elsewhere, note the NZD going full circle and now broadly outright weak after its status as king of the G10 as recently as less than two weeks ago. Gold posted a sharp reversal yesterday. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Note that the weakness in risk sensitive currencies like SEK, NZD, AUD & GBP are seeing those edging into a downtrend versus the US dollar – worth watching for a deepening of these moves if risk assets continue south into the New Year. The EURCHF bears watching if the pair can take out 0.9900-0.9950 as currently the pair is caught in a very tight range. NZD is rolling over in many pairings. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights 1330 – Canada Oct. GDP 1330 – US Nov. PCE Inflation 1330 – US Nov. Flash Durable Goods Orders 1500 – US Dec. Final University of Michigan Confidence   Source: https://www.home.saxo/content/articles/forex/fx-update-sterling-and-kiwi-stumble-as-year-winds-down-23122022

NZD/USD seesaws inside immediate trading range, prints mild gains. China Industrial Profits deteriorate, Beijing scraps Covid quarantine rule for inbound travelers. US Dollar Index prints three-day downtrend as softer US statistics challenge hawkish Fed bets. NZD/USD bulls flirt with the 0.6300 round figure while posting a three-day winning streak early Tuesday. In doing so, the Kiwi pair cheers the broadly-softer US Dollar, as well as the risk-on mood. However, recently downbeat data from China joins the holiday mood to probe the bulls. That said, China’s Industrial Profits dropped 3.6% during the January-November period versus -3.0% previous readings. Further, geopolitical fears emanating from Russia and North Korea also challenge the Kiwi pair buyers amid the year-end inaction in the markets. Even so, risk appetite remains firmer as scrapped the COVID quarantine rule for inbound travelers, starting from January 08. Furthermore, the softer prints of the US inflation and output data raise doubts about the Federal Reserve’s (Fed) next hawkish move and hence weigh on the US Dollar. As a result, the US Dollar Index (DXY) drops for the third consecutive day, down 0.13% intraday near 104.05 by the press time. On Friday, US Core Personal Consumption Expenditures (PCE) Price Index, mostly known as the Fed’s favorite inflation gauge, matched 4.7% YoY forecasts for November versus 5.0% prior. Further, the Durable Goods Orders for the said month marked a contraction of 2.1% compared to -0.6% expected and 0.7% previous readings. More importantly, the Nondefense Capital Goods Orders ex Aircraft marked improvement of 0.2% compared to 0.0% expected and 0.3% revised down prior. Additionally, the Federal Reserve (Fed) Bank of Atlanta’s GDPNow tracker rose to show +3.7% annualized growth for the fourth quarter (Q4) versus +2.7% previous estimates. Against this backdrop, S&P 500 Futures rise 0.75% intraday to 3,898 whereas the US 10-year Treasury yields retreat to 3.73% at the latest. Looking forward, China-linked optimism could join the bearish bias from the Fed to propel the NZD/USD pair during a likely inactive week comprising no major data/events. Technical analysis An upside break of the previous resistance line from December 15, around 0.6215 by the press time, keeps NZD/USD buyers hopeful amid the bullish MACD signals. However, the 21-DMA hurdle surrounding 0.6345 guards the quote’s immediate upside.

Considering that we are currently entering the Christmas and New Year holiday season, the NZD/USD Commodity currency pair on the 4-hour chart has the potential to move within a narrow range in the range 0.6228 - 0.6511, however due to the emergence of deviations between price movements and the Stochastic Oscillator indicator, the Kiwi has the potential to try to test the 0.6406 level as the first target and 0.6511 as the second target. However, if the momentum and volatility are inadequate, please pay attention to the 0.6228 level because if this level is successfully broken then NZD/USD has the potential to weaken. Relevance up to 02:00 2022-12-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/116399

NZD/USD holds lower ground near intraday bottom, extends pullback from 50-SMA. Failure to stay beyond 200-SMA, looming bear cross on MACD favor sellers. One-month-old ascending trend line restricts immediate downside. 61.8% Fibonacci retracement adds to the upside filters. NZD/USD prints mild losses around 0.6260 as it drops for the second consecutive day heading into Wednesday’s European session. In doing so, the Kiwi pair not only extends pullback from the 50-SMA but also marks one more downside move below the 200-SMA. The downside moves also take clues from the impending bear cross on the MACD indicator, as well as the lower high formation marked since December 13. That said, an upward-sloping support line from November 28, close to 0.6245, holds the key for the NZD/USD pair’s further downside. Also acting as the short-term key support is the monthly low near 0.6230, quickly followed by late November’s swing low surrounding 0.6290. Meanwhile, the 61.8% Fibonacci retracement level of the NZD/USD pair’s November 28 to December 13 upside, also known as the “Golden Ratio”, guards immediate recovery moves of the pair around 0.6290, in addition to the 200-SMA hurdle of 0.6283. During the quote’s run-up beyond 0.6290, the 0.6300 round figure and the 50-SMA resistance of 0.6311 could probe the NZD/USD bulls before giving them control. Even so, successful trading beyond the 50% Fibonacci retracement level surrounding 0.6335 appears necessary for the Kiwi pair buyers to keep the reins. NZD/USD: Four-hour chart Trend: Further downside expected  

NZD/USD is aiming to reclaim the 0.6350 hurdle despite a solid risk-aversion theme. The New Zealand Dollar is holding its revival amid optimism about China’s reopening. Fed’s ultra-hawkish policy has resulted in a sheer decline in US Pending Home Sales data. The NZD/USD pair has extended its recovery above 0.6320 in the Asian session. Earlier, the Kiwi asset picked up demand after dropping to near the round-level support at 0.6300. The major is expected to extend its recovery to near 0.6350 despite the risk-aversion theme in the global market. The return on 10-year US Treasury bonds has trimmed to near 3.86% despite caution in the market led by a sheer spike in Covid-19 infections in China, however, the upside is still favored. Meanwhile, S&P500 futures are not getting decent traction from the market participants amid weak risk appetite. The US Dollar Index (DXY) is struggling to cross the critical resistance of 104.40. Ambiguity in performance from different asset classes is expected ahead as trading activity has dropped amid the festive mood. The continuation of an ultra-hawkish monetary policy by the Federal Reserve (Fed) is significantly impacting the realty sector in the United States. On Wednesday, the National Association of Realtors published the Pending Home Sales, which declined by 4% on a monthly basis in November while the street was expecting an expansion of 0.6%. Higher interest rates by the Fed have forced households to drop the expression of buying a new home at the current juncture. Although, risk-perceived assets are facing the heat of China’s reopening after strict Covid measures. The New Zealand Dollar is holding its revival move as ease in supply chain disruptions will increase the trading activity of New Zealand with China. It is worth noting that New Zealand is one of the leading trading partners of China.

NZD/USD has slipped sharply below 0.6320 as the US Dollar Index has shown a recovery move. Market mood is turning cautious as the Covid-19 situation in China is getting vulnerable. Going forward, investors will keep an eye on China’s official PMI data. The NZD/USD pair has dropped to near intraday low at 0.6316 in the Asian session as the US Dollar Index (DXY) has attempted a recovery after dropping to near 103.50. The New Zealand Dollar has witnessed selling pressure as COVID-19 situation in China is getting more vulnerable. The headline of rising deaths from Covid-19 in China has spooked the market mood again. According to UK-based health data firm Airfinity “Around 9,000 people in China are probably dying each day from COVID-19. Also, cumulative deaths in China since Dec. 1 likely reached 100,000 with infections totaling 18.6 million. S&P500 futures are holding the majority of their gains recorded on Thursday, portraying cautious optimism in the global market. At the press time, the USD Index is attempting to extend its rebound move above the crucial hurdle of 103.70. Meanwhile, the 10-year US Treasury yields have recovered their entire morning losses and have scrolled above 3.83%. It seems that investors are shrugging off the release of an increment in initial jobless claims data and are supporting the USD index again. On Thursday, the United States Labor Statistics department reported an increase in jobless claims to 225K led by a pause in the recruitment process by various firms due to a bleak economic outlook. This week, investors will keep an eye on China’s official PMI data, which will release this weekend. As per the projections, the National Bureau of Statistics (NBS) Manufacturing PMI is seen higher at 49.2 vs. the former release of 48.0. A sheer outperformance is expected from the Non-Manufacturing PMI catalyst as the economic data is seen at 51.4 vs. the prior release of 46.7. It is worth noting that New Zealand is one of the leading trading partners of China and the PMI status of the Chinese economy will have a significant impact on the New Zealand Dollar.  

NZD/USD prints mild losses around a two-week high, justifies the previous day’s bearish candlestick formation. Previous support line from October, bearish MACD signals also keeps sellers hopeful. 200-day EMA holds the key to Kiwi bear’s conviction. NZD/USD holds lower ground near the intraday bottom of 0.6329 during the mid-Asian session on a sluggish Monday. The Kiwi pair’s latest inaction could be linked to the holidays in multiple markets, including New Zealand. Even so, the quote prints mild losses while justifying the previous day’s bearish Doji candlestick. Also favoring the NZD/USD bears are the bearish MACD signals and the pair’s sustained trading below the previous support line from October 13, now resistance around 0.6400. As a result, the Kiwi pair is likely to extend the latest weakness toward the 200-day Exponential Moving Average (EMA) support surrounding 0.6235. During the fall, the 0.6300 round figure may act as an intermediate halt whereas the late November swing low around 0.6155 could challenge the NZD/USD bears afterward. On the contrary, the Kiwi pair’s successful trading above 0.6400 support-turned-resistance could propel the quote toward the previous monthly high near 0.6515. It’s worth noting that the NZD/USD pair’s sustained run-up beyond 0.6515 enables the bulls to aim for a June 2022 high of 0.6575. Overall, NZD/USD is likely to extend the latest pullback but the downside room appears limited. NZD/USD: Daily chart Trend: Limited downside expected  

NZD/USD has slipped firmly to near 0.6300 as the US Dollar Index has climbed above 103.60. A release of the upbeat Caixin Manufacturing PMI at 49.0 has failed to support the New Zealand Dollar. Investors have turned cautious after the New Year celebrations and a long weekend. The NZD/USD pair has witnessed a sell-off in the Asian session despite upbeat China’s Caixin Manufacturing PMI data. The Kiwi asset has dropped to near the round-level support of 0.6300 despite figures remaining better than expectations but lower than the former release. The release of the economic data at 49.0 vs. the projections of 48.8 might support the New Zealand Dollar ahead, being one of the leading trading partners of China. Going forward, the status of China’s promotion of foreign trade and the capital attraction will remain in focus. China’s State Administration of Foreign Exchange (SAFE) Director Pan Gongsheng said on Tuesday, “China will use exchange rate policy tools to promote foreign trade, expand foreign capital stock and to manage its FX reserve assets in 2023,” Meanwhile, the risk-perceived assets are facing the heat of long weekend-inspired volatility. The risk appetite of the market participants has trimmed dramatically as investors are cautionary in making positions before settling in the market. S&P500 futures have witnessed decent selling pressure from the market participants as investors are concerned above economic prospects in CY2023. The US Dollar Index (DXY) has climbed to near 103.50 after a recovery move from the crucial support of 103.20. After the release of the Caixin Manufacturing PMI, investors will shift their focus toward the United States ISM Manufacturing PMI data, which will release on Wednesday.  

With the emergence of deviations between the price movements of the NZD/USD commodity currency pair and the CCI indicator, the Kiwi has the opportunity to appreciate upwards to test up to the 0.6439 level as its main target and the 0.6511 level as the next target to be achieved but if it is on its way to the targets If the Kiwi level suddenly reverses downwards until it passes the 0.6217 level, all scenarios for an upward movement described earlier will become invalid and cancel automatically. Relevance up to 03:00 2023-01-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/117183

In the opinion of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, further upside is expected once NZD/USD leaves behind the 0.6410 level. Key Quotes 24-hour view: “While we expected ‘the rally in NZD to extend’ yesterday, we held the view that ‘the major resistance at 0.6410 is unlikely to come under threat’. However, NZD edged one pip above 0.6410 (high of 0.6411) before pulling back. Upward momentum is slowing and this coupled with still overbought conditions suggests NZD is likely to trade sideways. The expected range for today is 0.6330/0.6405.” Next 1-3 weeks: “We highlighted yesterday (09 Jan, spot at 0.6350) that the risk for NZD has shifted to the upside but it must clear 0.6410 before further gains are likely. NZD subsequently rose to a high of 0.6411. Our view remains unchanged, as there is no clear break of 0.6410. On the downside, a breach of 0.6285 (‘strong support’ level was at 0.6250 yesterday) would indicate that the upside risk has subsided.”

NZD/USD edges higher on Thursday amid renewed USD selling bias, albeit lacks follow-through. Bets for less aggressive Fed rate hikes keep the US bond yields depressed and weigh on the USD. A positive risk tone further undermines the safe-haven buck and benefits the risk-sensitive Kiwi. Traders, however, seem reluctant to place aggressive bets ahead of the US CPI print on Thursday. The NZD/USD pair reverses an intraday dip to the 0.6340 area and trades with a mildly positive tone during the early European session. The pair is currently placed around the 0.6370-0.6375 region and remains well within the striking distance of a nearly three-week high touched on Monday. The intraday uptick is sponsored by the emergence of fresh selling around the US Dollar, weighed down by firming expectations that the Fed will soften its hawkish stance. The bets were reaffirmed by last week's data, which showed that the US wage growth in December and pointed to signs of easing inflationary pressures. Furthermore, business activity in the US services sector contracted and hit the worst level since 2009 in December. This, in turn, fuels speculations for a less aggressive policy tightening by the Fed, which keeps the US Treasury bond yields depressed near a multi-week low and is seen as a key factor undermining the buck. Apart from this, a generally positive tone around the equity markets dents the greenback's relative safe-haven status and benefits the risk-sensitive Kiwi. The NZD/USD pair, however, lacks bullish conviction as traders seem reluctant to place aggressive bets ahead of the US consumer inflation data, due for release on Thursday. Read next: According To Analysts, Russia May Collapse Within A Decade, Guaranty Trust Bank Has Fined| FXMAG.COM The crucial US CPI report should provide further clarity on whether the Fed will have to increase its target rate beyond 5% to curb stubbornly high inflation. This, in turn, will play a key role in influencing the near-term USD price dynamics and help determine the next leg of a directional move for the NZD/USD pair. In the meantime, the US bond yields could drive the USD demand and provide some impetus to the NZD/USD pair in the absence of any relevant market-moving economic releases from the US. Apart from this, traders will take cues from the broader market risk sentiment to grab short-term opportunities around the major.  

NZD/USD edges higher on Tuesday, though lacks follow-through buying beyond 0.6400. The upbeat Chinese macro data lends support, though a combination of factors cap gains. Recession fears, a modest USD strength keeps a lid on any meaningful upside for the pair. The NZD/USD pair gains some positive traction during the Asian session on Tuesday, though struggles to capitalize on the move beyond the 0.6400 round-figure mark. Spot prices remain confined in a familiar trading range held over the past one-and-half week or so. The better-than-expected Chinese economic data fueled optimism over a recovery in the world's second-largest economy and lends some support to the NZD/USD pair. In fact, China's recorded a  growth of 2.9% during the fourth quarter and Industrial Production surpassed estimates. Furthermore, Retail Sales shrank less than anticipated and pointed to a positive trend among consumers. That said, the worst yet COVID-19 outbreak in China continues to weigh on investors' sentiment. This is evident from a softer tone around the equity markets, which benefits the safe-haven US Dollar and acts as a headwind for the risk-sensitive Kiwi. This, in turn, warrants some caution for aggressive bullish traders and positioning for any meaningful appreciating move for the NZD/USD pair. The USD uptick, meanwhile, is more likely to remain capped amid growing acceptance that the Fed will soften its hawkish stance amid signs of easing inflationary pressures. Moreover, several Fed officials backed the case for smaller rate hikes and reaffirmed bets for a 25 lift-off in February. This should keep a lid on the buck and limit the downside for the NZD/USD pair, at least for now. The mixed fundamental backdrop might hold back traders from placing directional bets around the NZD/USD pair and supports prospects for an extension of the range-bound price action. Moving ahead, Tuesday's US economic docket features the release of the Empire State Manufacturing Index. This, along with the broader risk sentiment, might influence the USD and provide some impetus.

NZD/USD trades with modest losses on Thursday, though the downside remains cushioned. Looming recession risks weigh on investors’ sentiment and undermine the risk-sensitive Kiwi. Subdued USD price action lends some support to the major and helps limit any deeper losses. The NZD/USD pair edges lower during the Asian session on Thursday and moves away from its highest level since June 2022, around the 0.6530 area touched the previous day. Spot prices, however, manage to hold above the 0.6400 mark, making it prudent to wait for strong follow-through selling before positioning for any further intraday downfall. The weaker US macro data released on Wednesday adds to worries about a deeper global economic downturn and continues to weigh on investors' sentiment. This is evident from a softer tone around the equity markets and acts as a headwind for the risk-sensitive Kiwi, which reacts little to news that Prime Minister Jacinda Ardern will step down next month. That said, subdued US Dollar price action lends some support to the NZD/USD pair and helps limit the downside, at least for the time being. A further decline in the US Treasury bond yields, amid firming expectations for a less aggressive policy tightening by the Fed, keeps the USD bulls on the defensive. In fact, the markets now seem convinced that the US central bank will soften its stance and have been pricing in a smaller 25 bps rate hike in February. The bets were reaffirmed by the US data, showing that retail sales in December fell by the most in a year and manufacturing output recorded its biggest drop in nearly two years. That said, several FOMC members indicated on Wednesday that they will push on with more interest rate hikes even as inflation shows signs of easing and economic activity is slowing. Apart from this, looming recession risks should benefit the greenback's relative safe-haven status and exert some downward pressure on the NZD/USD pair. Traders now look to the US economic docket, featuring the Philly Fed Manufacturing Index, the usual Weekly Initial Jobless Claims and housing market data. Read next: The Japanese Yen (JPY) Weakened, The Aussie Pair Is Trading Above 0.70$| FXMAG.COM This, along with speeches by Fed officials and the US bond yields, might influence the USD price dynamics later during the early North American session. Apart from this, traders will take cues from the broader risk sentiment to grab short-term opportunities around the NZD/USD pair. Nevertheless, the mixed fundamental backdrop warrants some caution before placing aggressive directional bets

NZD/USD clings to mild gains during two-week uptrend. Cautious optimism in the market joins sluggish US Treasury yields, USD to favor buyers. Hawkish Fedspeak, recession fears probe upside momentum amid light calendar. NZD/USD remains mildly bid around 0.6415 as the Kiwi bulls cheer the upbeat sentiment amid sluggish hours of early Friday’s trading. In doing so, the quote reverses the previous day’s losses while bracing for the second consecutive weekly gain. The risk-on mood could be linked to the hopes of more stimulus from China, mainly after the People’s Bank of China’s (PBOC) fifth monthly inaction. On the same line could be the challenges for the Federal Reserve’s (Fed) rate hike trajectory emanating from the downbeat US data. On Thursday, the US Unemployment Claims dropped to the lowest levels since late April 2022 and the Philadelphia Fed Manufacturing Survey Index also improved However, US Building and Housing Starts joined the previously release downbeat US Retail Sales and Producer Price Index (PPI) to propel fears of a recession in the world’s largest economy, earlier backed by the softer wage growth and activity data from the US. It should be observed that New Zealand’s Business NZ PMI for December and Visitor Arrivals for November both eased in their latest readings and challenge the Kiwi pair buyers of late. Alternatively, the US Dollar Index (DXY) picks up bids to 102.15 as it consolidates the previous day’s losses, the biggest in over a week, as Fed policymakers favor higher rates during their last public appearances before the 15-day silence period ahead of the February Federal Open Market Committee (FOMC) meeting. It’s worth noting that the latest tension surrounding Taiwan also seems to probe the NZD/USD bulls. Amid these plays, the key US Treasury bond yields struggle to extend the previous day’s rebound from the multiday low while the S&P 500 Futures print mild gains. That said, stocks in the Asia-Pacific region trade mixed at the latest. Moving on, a lack of major data/events, as well as hawkish Fedspeak, could challenge the NZD/USD pair’s upside ahead of the key week comprising multiple activities, inflation and growth numbers for the key economies. Technical analysis The 100-bar Exponential Moving Average (EMA) joins the 50-EMA and the weekly support-turned-resistance to challenge the NZD/USD bulls around 0.6415. However, the previous day’s low of 0.6365 restricts the immediate downside of the quote, a break of which will highlight the 61.8% Fibonacci retracement level of the NZD/USD pair’s January 06-18 upside, near 0.6315.      

Summary:  Risk on tone supported by lower bond yields and US dollar. Saxo’s equity baskets show the best gains are in sectors benefiting from China’s reopening. If NZ's CPI slows more than expected, the NZDUSD may see profit taking. Chinese New Year brings limited market hours. Australia’s ASX200 to take out a new all-time high, but CPI is in the way. Gold and copper continue to rally up. Oil prices are higher ahead of the EU embargo on Russia. Tech profits expected to dive, but there is room for disappointment. Saxo Spotlight: What’s on investors & traders radars this week, January 23-27: US GDP, AU NZ CPI, Microsoft & Tesla earnings Risk on tone supported for now as bond yields hold near lows, along with US dollar index US Treasury bond yields trading at some of the lowest levels down about 0.8% from the October peak, but yields are up slightly at 3.48%. Yields look set for lower levels and could even head back down and could drop below the 200-day SMA. The next level we’re watching is if yields fall to 3.22%.  If that level is reached, it would theoretically support US equities. We’d also need to see the US dollar remain lower. The US dollar index is now down 10% from its September high, but rose slightly on Friday after hotter than expected US prouder inflation for November, which bolsters the case for the Fed to keep hiking, even if it’s at a slower pace. Most gains in Saxo's equity baskets are in sectors benefiting from China’s reopening The Travel, E-commerce basket of stocks are up the most this month, followed by Energy Storage and China Consumer and Technology basket. However year-on Year, the most growth is from Defence which is up 21%. Economic news brings FX into focus US fourth-quarter GDP data, European PMIs and the Bank of Canada rate decision, as well as CPI for Australia and NZ will all be watched. NZ Consumer prices are expected broadly to have climbed 7.1% in the fourth quarter from a year earlier, which could mark CPI is slowing from the prior 7.2% and, more importantly, less than the 7.5% predicted by the Reserve Bank in its most recent forecasts. Given the NZ dollar was one of the strongest currencies last week, it could face profit taking if the data is weaker than expected. Market hours are limited this week, for Chinese New Year This also means light volume is expected and thus moves could perhaps be amplified on thin trade. China’s market is shut all week (Monday to Friday), Hong Kong’s market is shut for Monday to Wednesday, Singapore’s market is shut for Monday and Tuesday. Australia’s market shut Thursday for Australia Day. Australia’s ASX200 could likely to take out a new all-time high..... this is supported by the rally in commodities and expected higher earnings from mining companies, which make up 25% of the market. However CPI is a focus this week. Our technical analyst backs up this thinking, that the ASX200 is likely to hit a new all high- for more click here. But the danger this week is if Q4 CPI is hotter than expected on Wednesday, then equities could see profit taking. However overall sentiment is bullish for the ASX as demand for copper and iron ore is likely to pick up after CNY. CPI is expected to rise to 5.8% YoY from 5.6% (trimmed Mean CPI). And CPI YoY is expected to rise to 7.7% YoY, from 7.3%. Hotter data could further fuel the AUD and a likely fuel a sell-off in tech stocks and real estate. In company news to watch, iron ore company Champion Iron (CIA) reports quarterly earnings. Given the iron ore price is up 66% from its low, its outlook is expected to be optimistic. In commodities Gold and copper are gaining momentum and oil rallies The precious metal, gold, has been supported by lower yields and the US dollar falling, which has supported gold up 19% from its September low. As Ole Hansen points out we might need to see ETF holdings pick up in Gold, to see longer term investors getting involved, which could support gold higher, or potentially we may see some profit taking. However, gold momentum remains as long as the USD and yields behave. Recall that if the Fed pauses rates and rates peak, we think there is a case for our outrageous prediction of gold hitting $3,000 coming true. Copper trades up 0.5% to $4.25, its highest level since June last year, continuing its 32% rally off its low on expectations that China will increase buying after the Luna New Year holiday. Plus there are also disruptions on copper output in Peru, which could impact 2% of global copper output. So given inventory levels are already lower and demand expectations are picking up, copper prices are underpinned. Gas and oil prices are also higher too ahead of the EU embargo on Russian products which starts on February 5th. Oil (WTI) is up 1.3% to $82.64, at this level since early November, after two weeks of gains. Refinery demand is supporting prices. Tech companies' profits are expected to dive, but earnings estimates could be too optimistic & disappoint In the S&P500(US500.I) tech companies, which make up 26% of the market, are expected to report a quarterly profit drop of 9.2% on average, according to Bloomberg. This could be the biggest tech profit drop since 2016. Forward 12-month earnings of 39% is also expected according to Bloomberg. The danger is that estimates are still too bullish, and markets will likely be disappointed, which would trigger a fall. Overall aggregate S&P500 earnings are expected to have grown 2.12% in the quarter and miners are expected to deliver the most growth, real estate with the least. So far, only 55 companies have reported in the S&P500 and earnings have fallen over 4% on average. So, the bear case is still a factor for some investors, especially in tech. More job cuts are expected with margins being squeezed. EV companies are also facing pressure with higher metal prices. On Tuesday Microsoft kicks off earning season. Defence giants Raytheon and Lockheed Martin report on Tuesday. Tesla reports Wednesday. On Thursday Intel and Mastercard report, and steel giant Nucor. On Friday Chevron. These could be industry proxies to watch with a major focus on their outlooks.   Key economic releases & central bank meetings this week to watch  Monday 23 January China, Hong Kong, Taiwan, South Korea, Indonesia, Malaysia, Singapore Market Holiday Japan BOJ Meeting Minutes (Dec) Tuesday 24 January China, Hong Kong, Taiwan South Korea, Malaysia, Singapore Market Holiday Australia Judo Bank Flash PMI, Manufacturing & Services Japan au Jibun Bank Flash Manufacturing PMI UK S&P Global/CIPS Flash PMI, Manufacturing & Services Germany S&P Global Flash PMI, Manufacturing & Services France S&P Global Flash PMI, Manufacturing & Services Eurozone S&P Global Flash PMI, Manufacturing & Services US S&P Global Flash PMI, Manufacturing & Services Thailand Customs-Based Trade Data (Dec) Germany GfK Consumer Sentiment (Feb) United Kingdom CBI Trends (Jan) Wednesday 25 January China, Hong Kong, Taiwan Market Holiday New Zealand CPI (Q4) Australia Composite Leading Index (Dec Australia CPI (Q4) Japan Leading Indicator (Nov, revised) Singapore Consumer Price Index (Dec) United Kingdom PPI (Dec) Thailand 1-Day Repo Rate (25 Jan) Germany Ifo Business Climate New (Jan) Canada BoC Rate Decision (25 Jan) Thursday 26 January Australia, China, Taiwan, India Market Holiday Japan BOJ Summary of Opinions (Jan) South Korea GDP (Q4) Japan Services PPI (Dec) Philippines GDP (Q4) Singapore Manufacturing Output (Dec) Norway Labour Force Survey (Dec) United Kingdom CBI Distributive Trades (Jan) Canada Business Barometer (Jan) United States Durable Goods (Dec) United States GDP (Q4, advance) United States Initial Jobless Claims United States New Home Sales (Dec) Friday 27 January China, Taiwan Market Holiday Japan CPI, Overall Tokyo (Jan) Australia PPI (Q4) Australia Export and Import Prices (Q4) United States Personal Income and Consumption (Dec) United States Core PCE (Dec) United States UoM Sentiment (Jan, final) United States Pending Home Sales (Dec) Source:Saxo Spotlight: What’s on investors & traders radars this week? | Saxo Group (home.saxo)

NZD/USD has overstepped the 0.6500 resistance amid a cheerful market mood. The New Zealand Dollar is driving the Kiwi asset towards the upper portion of the Rising Channel. An oscillation in the bullish range by the RSI (14) indicates more upside ahead. The NZD/USD pair surpassed the psychological resistance of 0.6500 in the early European session. The kiwi asset has picked strength as the US Dollar Index (DXY) has witnessed immense pressure after failing to recapture Monday’s high at 101.87. The USD Index has refreshed its day’s low at 101.47, portraying a risk appetite theme in the market. The S&P500 futures have managed to recover their morning losses and have turned positive. Meanwhile, the 10-year US Treasury yields are struggling at around 3.52%. NZD/USD is marching towards the upper portion of the Rising Channel chart pattern placed on a two-hour scale. The upper portion of the Rising Channel is placed from December 28 high at 0.6356 while the lower portion of the chart pattern is plotted from January 6 low at 0.6190. The 20-period Exponential Moving Average (EMA) at 0.6464 is acting as a major support for the New Zealand bulls. Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a bullish range of 60.00-80.00, which indicates that the upside momentum is firmer. For an upside move, the asset needs to surpass Wednesday’s high at 0.6530, which will drive the asset toward June 3 high at 0.6576. A breach of the latter will expose the asset to the round-level resistance at 0.6600. On the flip side, a breakdown below January 16 high at 0.6426 will drag the Kiwi asset toward January 17 low at 0.6366 followed by January 12 low around 0.6300. NZD/USD two-hour chart  

NZD/USD meets with some supply in reaction to unimpressive consumer inflation data. The yearly CPI rate falls short of RBNZ’s forecast and weighs on the domestic currency. Subdued USD price action lends some support to the pair and helps limit deeper losses. The NZD/USD pair comes under some selling pressure on Wednesday and snaps a three-day winning streak back closer to its highest level since June 2022 touched last week. The pair remains depressed below the 0.6500 psychological mark through the early European session, though lacks follow-through amid subdued US Dollar price action. The New Zealand Dollar weakens a bit following the release of domestic consumer inflation data, which showed that the headline CPI decelerated to 1.4% during the fourth quarter from the 2.2% previous. Adding to this, the annual inflation rate came in below the Reserve Bank of New Zealand's (RBNZ) 7.5% forecast and remained stable at 7.2%. The data forces investors to lower the expectations for the cash rate peak in New Zealand to 5%, from 5.5% and prompts some selling around the NZD/USD pair. Furthermore, worries about a deeper global economic downturn keep a lid on any optimism in the markets and further contributes to driving flows away from the risk-sensitive Kiwi. That said, the underlying bearish sentiment surrounding the greenback helps limit the downside for the NZD/USD pair. In fact, the USD Index, which tracks the greenback's performance against a basket of currencies, remains depressed near a nine-month low amid expectations for a less aggressive tightening by the Fed. Read next: South African Petrochemical Company Sasol Is Moving Away From Fossil Fuels, Germany Again Refused To Send Tanks To Ukraine| FXMAG.COM The markets now seem convinced that the US central bank will soften its hawkish stance and have been pricing in a greater chance of a smaller 25 bps rate hike in February. This might continue to weigh on the buck and supports prospects for the emergence of some dip-buying around the NZD/USD pair. Hence, it will be prudent to wait for strong follow-through selling before confirming that the pair has topped out in the near term and positioning for any deeper corrective pullback. There isn't any major market-moving economic data due for release from the US on Wednesday. That said, the broader risk sentiment might influence the USD price dynamics and provide some impetus to the NZD/USD pair. Traders, however, might prefer to wait on the sidelines ahead of this week's important US macro releases, including the Advance Q4 GDP print and the Core PCE Price Index on Thursday and Friday, respectively.

The New Zealand dollar is under pressure on Wednesday. In the European session, NZD/USD is trading at 0.6478, down 0.41%. Markets eye New Zealand CPI The New Zealand dollar reacted negatively to today’s CPI release, falling as much as 0.60% before paring these losses. Fourth-quarter CPI remained unchanged at 7.2%, a notch above the consensus of 7.1%. More importantly, the reading was below the Reserve Bank of New Zealand’s forecast of 7.5%, which could mean that the central bank will ease up on the pace of rate hikes. The central bank has been aggressive, as it raised rates by some 325 basis points in 2022, bringing the cash rate to 4.25%. Similar to the Fed’s experience, the markets aren’t buying into the RBNZ’s hawkish message and are betting that rates will peak at 5.0%, lower than the RBNZ’s projection of 5.5%. The central bank delivered a supersize 75-basis point hike in November, and prior to the inflation release, the market had priced in a 75 bp or 50 bp hike as a 50/50 toss-up. Following the CPI reading, that has changed to 70/30 in favour of a 50-bp move. Inflation has been falling globally while domestically, consumer spending and confidence have fallen due to the rising cost of living. This has raised speculation that the RBNZ could wind up its current rate cycle earlier than it anticipated. The US releases GDP for the fourth quarter on Thursday and we could see some volatility from the US dollar. GDP is expected to slow to 2.8%, down from 3.2% in Q3 but still a respectable pace of growth. On Wednesday, US PMIs pointed to contraction in the manufacturing and services sectors, pointing to cracks in the US economy as high rates continue to take their toll. The US dollar remains under pressure as soft readings have raised hopes that the Fed will ease up on rate policy due to the slowing economy. Read next: The Aussie Pair Is Gaining Strong Positive Traction Agian, USD/JPY Drop Below 130.00| FXMAG.COM NZD/USD Technical 0.6455 is under pressure in support.  The next support line is 0.6379 There is resistance at 0.6547 and 0.6648 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

NZD/USD is displaying back-and-forth action ahead of US GDP data. The USD Index is aiming to build a cushion around 101.20 despite the risk-on market mood. The Ascending Triangle formation is indicating a squeeze in volatility. The NZD/USD pair is continuously facing hurdles in recapturing the psychological resistance of 0.6500 in the early European session. The Kiwi asset is expected to remain on the tenterhooks as investors are awaiting the release of the United States Gross Domestic Product (GDP) data. The US Dollar Index (DXY) is aiming to build a cushion around 101.20 as anxiety among investors is escalating regarding the US GDP, core Personal Consumption Expenditure (PCE), and Durable Goods Orders data. Meanwhile, positive market sentiment is solidifying further as the S&P500 futures have extended their morning gains. NZD/USD is displaying topsy-turvy action in an Ascending Triangle chart pattern that indicates volatility contraction on an hourly chart. The New Zealand Dollar has sensed demand after dropping to near the upward-sloping trendline plotted from January 19 low at 0.6365 while the horizontal resistance is placed from January 18 high at 0.6531. The 20-EMA at 0.6483 is overlapping the Kiwi asset, which indicates consolidation ahead. Also, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which indicates an absence of a potential trigger for a decisive move. For an upside move, the asset needs to surpass Wednesday’s high at 0.6530, which will drive the asset toward June 3 high at 0.6576. A breach of the latter will expose the asset to the round-level resistance at 0.6600. On the flip side, a breakdown below January 16 high at 0.6426 will drag the Kiwi asset toward January 17 low at 0.6366 followed by January 12 low around 0.6300. NZD/USD hourly chart  

NZD/USD surrenders modest intraday gains amid the emergence of some buying around the USD. Thursday’s upbeat US macro data fuels hawkish Fed expectations and underpins the greenback. A positive risk tone acts as a headwind for the buck and offers support to the risk-sensitive Kiwi. The NZD/USD pair continues with its struggle to find acceptance above the 0.6500 psychological mark and seesaws between tepid gains/minor losses on Friday. The pair trades around the 0.6485-0.6480 region during the early European session and remains well within a familiar trading range. A modest US Dollar strength is seen as a key factor acting as a headwind for the NZD/USD pair, though a generally positive tone around the equity markets limits the downside for the risk-sensitive Kiwi. The greenback draws some support from the mostly upbeat US macro data released on Thursday, which backs the case for the Fed to maintain its hawkish stance for longer. This leads to a further recovery in the US Treasury bond yields and underpins the buck. The robust economic indicators, meanwhile, boost investors' confidence and acts as a headwind for the safe-haven greenback. Furthermore, the markets still seem convinced that the US central bank will slow the pace of its policy tightening. The CME's FedWatch Tool points to a nearly 90% probability for a smaller 25 bps rate hike at the upcoming FOMC meeting next week. This further contributes to capping the greenback and lends support to the NZD/USD pair. Traders might also be reluctant to place aggressive bets and prefer to wait for the release of the US Core PCE Price Index - the Fed's preferred inflation gauge. This, along with the US bond yields and the broader risk sentiment, might influence the USD and provide some impetus to the NZD/USD pair. The fundamental backdrop, meanwhile, warrants some caution before confirming that the pair has topped out and positioning for any meaningful corrective pullback.

NZD/USD is facing hurdles in shifting its auction above 0.6500 amid a recovery in the USD Index. Softening consumer spending has bolstered the expectations of a smaller interest rate hike by the Fed. This week, the release of the NZ Employment data will be of utmost importance. The NZD/USD pair is failing in keeping its auction above the psychological resistance of 0.6500 in the early European session. The Kiwi asset is facing pressure as the US Dollar index (DXY) has shown a perpendicular recovery move after a sheer decline to near 101.40. The recovery move in the USD Index is quite strong and is showing signs of vertical decline in the risk appetite of the market participants. S&P500 futures are continuously adding more losses as investors have underpinned the risk-aversion theme amid soaring volatility ahead of the interest rate decision by the Federal Reserve (Fed). While the alpha generated by the US government bonds has trimmed as investors are seeing a lower terminal rate than previously anticipated. The 10-year US Treasury yields have dropped to near 3.50%. Softening consumer spending and Personal Consumption Expenditure (PCE) Price Index have bolstered the expectations of a smaller interest rate hike by the Fed. It is worth noting that Fed chair Jerome Powell has already trimmed the scale of interest rate hikes in its December monetary policy meeting to 50 basis points (bps) after announcing four consecutive 75 bps rate hikes. The Fed is expected to trim the scale of the interest rate hike further by 25 bps. On the New Zealand front, investors are awaiting the release of the Employment data, which is due on Wednesday. The Employment Change (Q4) is expected to drop to 0.7% from the former release of 1.3%. While the Unemployment Rate is seen unchanged at 3.3%. The New Zealand economy is failing to generate significant employment opportunities amid higher interest rates by the Reserve Bank of New Zealand (RBNZ).  

According to Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group, NZD/USD could navigate within 0.6400 and 0.6535 in the next few weeks. Key Quotes 24-hour view: “We held the view that NZD ‘is likely to trade sideways within a range of 0.6465/0.6510’ yesterday. Our view of sideways trading was not wrong even though NZD traded within a slightly narrower range than expected (0.6465/0.6507). The underlying tone has softened and NZD is likely to edge lower toward 0.6440. The major support at 0.6400 is unlikely to come into view. Resistance is at 0.6490, followed by 0.6505.” Read next: Glovo Is Planning To Layoff 250 Workers Worldwide, The Middle East Is Already Suffering From A Water Shortage| FXMAG.COM Next 1-3 weeks: “Our update from last Thursday (26 Jan, spot at 0.6492) is still valid. As highlighted, NZD is likely to trade between 0.6400 and 0.6535 for the time being.”

NZD/USD is scaling towards 0.6450 as the USD Index has retreated after a short-lived pullback. Federal Reserve is widely anticipated to announce a 25 bps interest rate hike to 4.50-4.75%. Reserve Bank of New Zealand might continue its hawkish stance despite weak Employment data. NZD/USD is testing the consolidation breakdown and is likely to display a fresh downside ahead. NZD/USD has stretched its recovery above the critical resistance of 0.6440 in the early European session. The Kiwi asset displayed a recovery move after testing Tuesday’s low around 0.6415 due to subdued performance by the US Dollar Index (DXY). The USD Index is demonstrating topsy-turvy moves in a 101.70-101.80 range and is likely to display a downside break due to less anxiety among investors than usual ahead of the interest rate decision by the Federal Reserve (Fed). S&P500 futures are failing to square off their losses that emerged in the Asian session, portraying a caution despite overall optimism in the market mood. Widely anticipated expression of further decline in the policy tightening pace by the Federal Reserve is not compelling the market participants to dump risk-sensitive assets. However, emerging United States recession fears due to the expectation of further stretch in the interest rate have shifted investors to the sidelines. The return generated by 10-year US Treasury bonds is hovering around 3.51% after a mild correction. Lower Labor cost and consumer spending bolsters the case of the less-hawkish Fed’s policy The Employment Cost Index (Q4) released on Tuesday was trimmed to 1.0% vs. the consensus of 1.1% and the prior release of 1.2%. Easing negotiation power for labor costs is music to the ears for the Federal Reserve, which is working hard to achieve price stability in the United States. Also, the Personal Consumption Expenditure (PCE) price index released last week showed that consumer spending contracted in December Christmas celebrations, which claims that the downside trend in the US Consumer Price Index (CPI) will continue further. Economists at Goldman Sachs have come up with expectations for dictations by Federal Reserve chair Jerome Powell in February’s monetary policy meeting. They believe that "Since the FOMC last met in December, incoming data on wage growth and inflation have been encouraging, while signals on activity growth have been mixed and at times concerning. This ended up making the case for slowing the pace of rate hikes to 25bp this week quite easy.” For further guidance, Goldman Sachs expects two additional 25bp hikes in March and May, but fewer might be needed if weak business confidence depresses hiring and investment. US Employment data remains key ahead of Federal Reserve policy The tight US labor market is losing its luster as firms are ditching the recruitment process due to a bleak economic outlook. Higher interest rates and lower retail demand has already forced the firms to suspend their expansion plans for some time. Also, a few firms are not operating at full capacity, which has trimmed the requirement of hiring fresh talent. This has also trimmed the negotiation power of employees to determine talent acquisition costs. As per the consensus, the US Automatic Data Processing (ADP) (Jan) Employment data is seen at 170K, significantly lower than the former release of 235K. The declining scale of job additions due to weaker economic projections is going to delight the Federal Reserve as it will trim inflation projections further. Apart from the Employment data, US ISM Manufacturing PMI (Jan) will be of significant importance. Manufacturing activities are expected to be slowed to 48.0 vs. 48.4 in the prior release as firms are not deploying their entire operating capacity. However, the New Order Index is seen higher at 46.1 vs. the former release of 45.2. An upbeat forward demand might provide some cushion to the USD Index. Read next: AUD/USD Pair Remains Under Strong Selling Pressure, The EUR/USD Pair Has Been Falling But Remains Above 1.08$| FXMAG.COM New Zealand Dollar holds strength despite weak job data The New Zealand Dollar remained extremely volatile in the Asian session due to the release of the Employment data (Q4) and Caixin Manufacturing PMI data. The Employment Change dropped to 0.2% from the expectations of 0.3% and the former release of 1.3%. While the Unemployment Rate has increased to 3.4% from the consensus and the prior release of 3.3%.  Apart from that Quarterly Labor cost index has landed at 1.1% lower than the estimates of 1.3% but similar to the prior release of 1.1%. Steady employment bills and declining labor demand might delight the Reserve Bank of New Zealand (RBNZ), which is working with immense enthusiasm and zeal to achieve price stability. Reserve Bank of New Zealand Governor Adrian Orr might continue hiking interest rates as the inflation rate is still above 7%. The Caixin manufacturing PMI landed at 49.2 lower than the expectations of 49.5 but higher than the former release of 49.0. It is worth noting that New Zealand is one of the leading trading partners of China and an unimpressive PMI has a vital impact on the New Zealand Dollar. NZD/USD technical outlook NZD/USD has sensed selling interest after testing the strength of the consolidation breakdown in the 0.6450-0.6470 range on a four-hour scale. On a broader note, the kiwi asset demonstrated signs of bearish reversal after a Double Top chart pattern around December 13 high at 0.6515. An absence of stellar buying interest while attempting to surpass the 0.6515 resistance triggered selling pressure for the New Zealand Dollar. The 50-period Exponential Moving Average (EMA) at 0.6460 is acting as a major barricade for the New Zealand Dollar. Meanwhile, the Relative Strength Index (RSI) (14) has also slipped into the bearish range of 20.00-40.00, which indicates that the downside momentum is active now

NZD/USD retreats from the eight-month high as bulls take a breather ahead of the second round of central bank dossier during early Thursday. In doing so, the Kiwi pair keeps the Federal Reserve (Fed) inspired gains around 0.6530 by the press time. That said, the Fed’s dovish rate hike triggered the strongest bullish options market sign for the NZD/USD traders. A one-month risk reversal (RR) of the NZD/USD pair, a ratio of call options versus put options, prints a +0.080 figure at the latest. With this, the Daily RR prints not only snap a two-day winning streak but also mark the highest level in three weeks. It’s worth noting, however, that the weekly RR still remains negative, suggesting the bear’s dominance, for the third time in a row as it prints -0.165 figure at the latest. Also read: NZD/USD struggles to surpass 0.6530, upside remains favored ahead of US NFP

NZD/USD stages a modest recovery from a one-month low, though lacks follow-through buying. A stronger USD, along with the risk-off environment, acts as a headwind for the risk-sensitive Kiwi. The fundamental backdrop supports prospects for an extension of the recent decline for the pair. The NZD/USD pair finds some support near the 0.6300 mark and rebounds a few pips from a one-month low touched earlier this Monday. Spot prices, however, struggle to capitalize on the move and remain vulnerable to extend the recent sharp pullback from the highest level since June 2022 touched last week. A combination of factors assists the US Dollar to build on Friday's strong recovery from a nine-month low and caps the upside for the NZD/USD pair. The upbeat US monthly jobs report forced investors to scale back their expectations for an imminent pause in the Fed's policy-tightening cycle. This, along with the prevalent risk-off environment, further underpins the safe-haven buck and acts as a headwind for the risk-sensitive Kiwi. The headline NFP print surpassed even the most optimistic estimates and showed that the US economy added 517K new jobs in January. Furthermore, the unemployment rate unexpectedly dipped to 3.4% during the reported month and pointed to the underlying strength in the US labor market. This could allow the Fed to keep raising interest rates, which, in turn, pushes the US Treasury bond yields higher and continues to benefit the greenback. Meanwhile, expectations that the US central bank will stick to its hawkish stance for longer fuel concerns about economic headwinds stemming from the continuous rise in borrowing costs. Adding to this, unimpressive quarterly earnings reports from tech companies leads to a further decline in the equity markets. The fundamental backdrop seems tilted firmly in favour of the USD bulls and supports prospects for additional losses for the NZD/USD pair. Read next: The US Judge Denied The FTC's Request, Giving The Meta An Important Victory| FXMAG.COM There isn't any major market-moving economic data due for release from the US on Monday, leaving the greenback at the mercy of the US bond yields. Apart from this, the broader risk sentiment might influence the USD price dynamics and contribute to producing short-term trading opportunities around the NZD/USD pair.

If we look at the daily chart, NZD/USD commodity currency pairs looked seen a few things: 1. Stochastic Oscillator indicator was in Oversold area. 2. Golden Cross occurs from its MA 50 and MA 200. 3. Kiwi's price movement is in the middle of the MA 50 and MA 200 crossing. From those three things above we can conclude that right now Kiwi is in the Sideways condition however, Buyers have started to enter this commodity currency pair so that in the near future as long as there is no significant movement that causes NZD/USD to fall down and penetrate the 0.6188 level, the Kiwi has the potential to appreciate an upward rally to test the 0.6511 level again as its main target and if this level is successfully broken upwards, Kiwi will potentially continue the rally up to the level of 0.6775. Relevance up to 01:00 2023-02-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/119005

NZD/USD gains strong positive traction on Thursday and rallies to the top end of the weekly range. A positive risk tone undermines the safe-haven USD and seems to benefit the risk-sensitive Kiwi. The prospects for additional rate hikes by the Fed could limit the USD losses and cap the major. The NZD/USD pair attracts some meaningful buying on Thursday and extends its steady intraday ascent through the early European session. The pair is currently placed around the 0.6350 region, just a few pips below the weekly high touched on Tuesday and is supported by a modest US Dollar weakness. The uncertainty over the Fed's rate-hike path fails to assist the USD to build on its post-NFP rally to a one-month high, which, in turn, acts as a tailwind for the NZD/USD pair. Apart from this, a recovery in the global risk sentiment - as depicted by a generally positive tone around the US equity futures - weighs on the safe-haven buck and benefits the risk-sensitive Kiwi. The downside for the USD, however, seems limited amid diminishing odds for an imminent pause in the Fed's policy-tightening cycle. In fact, a slew of FOMC members echoed Fed Chair Jerome Powell's hawkish view on Tuesday that additional rate hikes were likely warranted to control inflation. This, in turn, might hold back bulls from placing aggressive bets around the NZD/USD pair. Read next: The GBP/USD Pair Climbed To Around 1.2100, The EUR/USD Pair Is Above 1.0700| FXMAG.COM Moreover, looming recession risks should keep a lid on any optimistic move in the markets, which should drive some haven flows towards the buck and contribute to capping the NZD/USD pair. Investors remain concerned about economic headwinds stemming from rising borrowing costs and the COVID-19 outbreak. This, along with fears about worsening US-China relations, could weigh on the sentiment. The aforementioned fundamental backdrop makes it prudent to wait for some follow-through buying before confirming that the NZD/USD pair's recent pullback from the highest level since June 2022 has run its course. Market participants now look forward to the US Weekly Initial Jobless Claims data, which, along with the broader risk sentiment, might provide some impetus to the major.

NZD/USD rebounds over 50 pips from the daily low amid the emergence of some USD selling. A modest recovery in the risk sentiment weighs the buck and benefits the risk-sensitive Kiwi. Hawkish Fed expectations, recession fears should limit the USD downside and cap the major. The NZD/USD pair attracts some buyers near the 0.6290 area on Monday and climbs to a fresh daily high during the first half of the European session. The pair is currently placed just below mid-0.6300s, though remains well within a familiar trading band held over the past week or so. The US Dollar fails to capitalise on its modest intraday gains and turns out to be a key factor lending some support to the NZD/USD pair. A softer tone surrounding the US Treasury bond yields acts as a headwind for the greenback. Apart from this, an intraday recovery in the US equity markets further undermines the safe-haven buck and benefits the risk-sensitive Kiwi. That said, worries about a deeper global economic downturn should keep a lid on any optimism in the markets. Apart from this, the prospects for further policy tightening by the Fed could help limit any meaningful downside for the USD and cap the upside for the NZD/USD pair. This, in turn, warrants some caution for bulls and before positioning for further gains. Investors now seem convinced that the Fed will stick to its hawkish stance. The bets were reaffirmed by the Labor Department's annual revisions of CPI, which showed that consumer prices rose in December instead of falling as previously estimated. Separately, the University of Michigan survey's one-year inflation expectations climbed to 4.2% in February from the 3.9% previous. Read next: Poland’s President Andrzej Duda Said The Decision To Send Fighter Jets To Ukraine Was “Not Easy To Take”| FXMAG.COM This raises the risk of higher inflation print for January and dashes hopes for an imminent pause in the Fed's rate-hiking cycle. Hence, the market focus will remain glued to the crucial US CPI report on Tuesday. Heading into the key data risk, traders might refrain from placing aggressive bets around the NZD/USD pair in the absence of relevant economic data on Monday. Technical levels to watch remaining time till the new event being published U.S.: Leading Indicators

If we pay attention on its 4 hour chart NZD/USD commodity currency pairs, there is a few interesting facts: 1. The appearance of Ascending Broadening Wedge pattern, 2. Followed by the formation of Bearish 123 pattern. 3. Stochastic Oscillator indicator which trying to come back down from its Overbought level. Based on those three facts above clearly seen if Kiwi in the nearest future has the potential to continue the downside where currently "Isolated Low" level which is point 2 at the level 0,6286 will try to break down by NZD/USD. If this level successfully broken down then the next level the to aim for is 0.6208 with a note that during the journey to these levels there is no significant upward correction movement to break above 0.6386 because if this level is breaks and exceeded then the downside scenario that has been described Previously it was canceled by itself.   Relevance up to 04:00 2023-02-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/119399

NZD/USD is looking to stretch its recovery move above 0.6350 amid the risk-on mood. Federal Reserve might remain favored for policy tightening continuation despite inflation softening ahead. Reserve Bank of New Zealand inflation expectations has dropped to 3.30% from the prior release of 3.62% for two years from now. NZD/USD is oscillating in an Inverted Flag that favors the downside on a broader basis. NZD/USD has rebounded firmly after a corrective move to near 0.6330 in the Asian session. The Kiwi asset is looking to stretch its recovery move above the immediate resistance of 0.6350 as the US Dollar Index (DXY) has extended its downside to near 102.77. Considering the downside pressure in the USD Index ahead of the release of the January inflation report, it is likely that investors are highly confident that the annual Consumer Price Index (CPI) will continue its declining trend consecutively for the seventh time. S&P500 futures are demonstrating a subdued performance, portraying a minor caution for fresh buying. However, the upside strength shown by the 500-US stocks basket on Monday indicates that the risk appetite theme is extremely solid. The demand for US government bonds is escalating vigorously, which has trimmed the return generated on the 10-year US Treasury yields to 3.70%. Annual US Inflation looks to trim consecutively for the seventh time From the whooping figure of 9.1%, the headline inflation in the United States has already come down to 6.5% in January and investors are expecting further decline as higher interest rates have forced the firms to scale down their production activities. Analysts at RBC Economics expect CPI growth to edge down to 6.2% in January from 6.5% in December (YoY). Food price growth likely also continued to slow, albeit from very high levels. By contrast, we expect energy price growth to tick up for the first time in 7 months – though to an 8% rate that is still well below a June peak of 42%. We look for core inflation to slow further in January, coming in at 5.4% YoY, down from 5.7% in December. All told, recent inflation reports have pointed to a relatively broadly-based easing in price pressures.” Another school of thought believes that the Consumer Price Index (CPI) could deliver a surprise move as the labor market has remained upbeat in January month. Higher demand for labor is contained by offering them higher wages, which carries the potential of propelling the overall consumer spending as households will be equipped with more funds for disposal. Meanwhile, the Federal Reserve Bank of New York's monthly Survey of Consumer Expectations showed on Monday that the US consumers' one-year inflation expectation stayed unchanged at 5% in January. Federal Reserve to continue sound hawkish despite softer CPI release The street is laser-focused on the release of the price index data as it will provide meaningful cues for further monetary policy action by the Federal Reserve. Fed chair Jerome Powell has already cleared that inflation is stubborn in nature and a premature consideration of pausing rates or cutting them could paddle up the inflationary pressures again. No doubt, December’s economic indicators were in favor of a policy tightening pause, however, the stronger-than-anticipated US Nonfarm Payrolls (NFP) stole the spotlight. For interest-rate guidance, Fed Governor Michelle Bowman said on Monday the Fed will continue to raise interest rates, pointing out there will be a lot of data releases between now and the next policy meeting. Read next: Poland’s President Andrzej Duda Said The Decision To Send Fighter Jets To Ukraine Was “Not Easy To Take”| FXMAG.COM RBNZ to consider mega rate hike despite slowing inflation projections The Reserve Bank of New Zealand (RBNZ) has been hiking its Official Cash Rate (OCR) significantly to decelerate the pace of price pressures. After recording a multi-decade high of 7.3%, New Zealand’s inflation dropped marginally to 7.2% in the fourth quarter of CY2022. Led by higher interest rates from Reserve Bank of New Zealand Governor Adrian Orr, employment opportunities have slowed down and the Unemployment Rate has increased to 3.4%. Also, inflation expectations reported by the Reserve Bank of New Zealand have dropped to 3.3% on a quarterly basis from the former release of 3.62% for two years from now. In spite of the indicators favoring further exhaustion in the inflationary pressures, the Reserve Bank of New Zealand might continue to hike interest rates with a big number. The inflation rate is extremely skewed upside from the desired rate of 2%. Therefore, a decision of bumper interest rate hike cannot be ruled out. NZD/USD technical outlook NZD/USD is oscillating in an Inverted Flag chart pattern on a four-hourly scale. The chart pattern indicates a sheer consolidation that is followed by a breakdown. Usually, the consolidation phase of the chart pattern serves as an inventory adjustment in which those participants initiate shorts, which prefer to enter an auction after the establishment of a bearish bias. The New Zealand Dollar is continuously facing pressure from the 50-period Exponential Moving Average (EMA) at 0.6355, which indicates more weakness ahead. Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in the 40.00-60.00, which indicates that investors await a potential trigger for a decisive move.     search   g_translate    

NZD/USD marks the second defeat from 50-DMA, renews intraday low. Three-month-old rising wedge restricts downside ahead of 200-DMA. Bearish MACD signals, downbeat RSI and failure to cross 50-DMA favor sellers. NZD/USD takes offers to refresh the intraday low near 0.6300 as it extends the previous day’s pullback from the 50-DMA hurdle during early Wednesday. In doing so, the Kiwi pair marks the second such failure to cross the key Daily Moving Average (DMA) while staying inside a three-month-old rising wedge bearish chart formation. Other than the failure to cross the 50-DMA, bearish MACD signals join the downbeat RSI (14), not oversold, to keep the bears hopeful. However, a clear downside break of the three-month-old ascending support line, forming part of the stated rising wedge bearish chart formation, near 0.6290, becomes necessary. Read next: Walmart Plans To Close Offices, Ford Invests In Battery Factories | FXMAG.COM Following that, the 200-DMA support surrounding 0.6180 and the mid-November 2022 swing low around 0.6065, could act as the last defense before directing the Kiwi pair toward the theoretical target of 0.5810. During the fall, the 0.6000 round figure may act as an extra filter towards the north. Alternatively, a daily closing beyond the 50-DMA hurdle surrounding 0.6375 could aim for the 0.6400 threshold and the stated wedge’s top line near 0.6540. Though, any further upside appears less lucrative unless crossing the June 2022 high of near 0.6575. NZD/USD: Daily chart Trend: Further downside expected remaining time till the new event being published U.S.: Leading Indicators

NZD/USD picks up bids to probe two-day downtrend near six-week low. Support-turned-resistance line from early January guards immediate upside. 200-SMA appears a tough nut to crack for bulls, sellers can aim for 2023 bottom. Downbeat oscillators, sustained trading below the key technical levels favor sellers. NZD/USD renews intraday high near 0.6290 as it bounces off a 1.5-month low marked the previous day during Thursday’s mid-Asian session. In doing so, the Kiwi pair takes clues from the nearly oversold RSI (14) to portray a corrective bounce after declining in the last two consecutive days, not to forget mentioning that it posted the biggest daily loss in two weeks on Wednesday. It should, however, be noted that the recovery moves need to cross the six-week-old previous support line, now resistance around 0.6400, to convince intraday buyers. Even so, a fortnight-old descending trend line and the 200-bar Simple Moving Average (SMA), respectively near 0.6365 and 0.6385 in that order, could challenge the pair’s further upside. In a case where the NZD/USD pair remains firmer past 0.6385, the 0.6400 could act as a validation point for the rally targeting the monthly peak surrounding 0.6540. On the contrary, pullback moves should break the 0.6250 horizontal support to recall the NZD/USD bears. Following that, the previous monthly low of 0.6190 and late November 2022 bottom around 0.6155 will gain the pair seller’s attention. Overall, NZD/USD is likely to remain bearish despite the latest rebound. NZD/USD: Four-hour chart Trend: Bearish remaining time till the new event being published U.S.: Leading Indicators

According to Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, further selling pressure could drag NZD/USD to the 0.6220 in the next few weeks. Key Quotes 24-hour view: “Yesterday, we expected NZD to trade within a range of 0.6300/0.6365. However, NZD plummeted to 0.6253 before rebounding. Despite the rebound, the weakness does not appear to have stabilized. From here, as long as NZD stays below 0.6310 (minor resistance is at 0.6290), NZD could dip to 0.6240 before stabilization is likely. The major support at 0.6220 is not expected to come under threat today.” Read next Apple Is Facing Multiple Lawsuits And Enforcement Actions| FXMAG.COM “Our latest narrative was from two days ago (14 Feb, spot at 0.6360) where NZD is likely to consolidate and trade between 0.6270 and 0.6450. Yesterday, NZD cracked the solid support at 0.6270 and dropped to 0.6253. The rapid increase in downward momentum suggests NZD could drop further to 0.6220, possibly 0.6195. The downside risk is intact as long as NZD stays below the ‘strong resistance’ level, currently at 0.6345.”

NZD/USD drops for the fourth consecutive day as bears poke January’s low. Fears of inflation peak in New Zealand, geopolitical concerns probe RBNZ hawks. US data, yields join upbeat Fed talks to keep rate hike concerns on the table and propel US Dollar. Risk catalysts can entertain traders ahead of next week’s FOMC Minutes, RBNZ. NZD/USD bears keep the reins for the fourth consecutive day as the quote drops to the lowest level since early January, following a U-turn from the weekly top on Tuesday. That said, the Kiwi pair sellers attack 0.6220-15 support during early Friday in Europe. Earlier in Asia, New Zealand Financial Minister Robertson said events will exacerbate a slowdown in the economy and that is evidence that inflation has peaked. The same challenges the hawkish bias surrounding the Reserve Bank of New Zealand (RBNZ) ahead of the next week’s monetary policy meeting. On the other hand, a slew of US statistics concerning inflation, employment and output push back the Fed’s policy pivot talks and help the Federal Reserve (Fed) officials to suggest higher rates. The fashion could be witnessed in the latest comments from the Fed officials and the FEDWATCH tool, observed via Reuters. That said, Cleveland Fed President Loretta Mester and St. Louis Federal Reserve's James Bullard were the latest to sound the hawkish alarm. It should be noted that the recent fears of more US-China tussles over the spy balloon and Taiwan also bolster the US Dollar’s safe-haven demand, which in turn weighs on the NZD/USD price. The geopolitical fears have a double impact on the Kiwi pair due to New Zealand’s trade ties with China. Amid these plays, S&P 500 Futures dropped half a percent intraday to 4,086 while poking the weekly low after falling the most in a month on Thursday. Additionally, the US 10-year Treasury bond yields rise to a fresh high since December 30, 2022, whereas the two-year US Treasury bond also renews its highest levels since November 2022. Moving ahead, the next week’s monetary policy meeting minutes of the Federal Open Market Committee (FOMC) and the RBNZ Interest Rate Decision will be crucial for the NZD/USD traders to watch for clear directions. Market forecasts suggest another 0.50% rate hike from the RBNZ before teasing the policy pivot. Technical analysis NZD/USD pair’s sustained downside break of the previous support line from mid-November 2022, now resistance around 0.6300, keeps the pair bears hopeful. Adding strength to the downside bias are the bearish MACD signals and the lower high formation on the daily chart. However, a daily closing below a 2.5-month-long support line, currently around 0.6220-15, becomes necessary for the bears to keep the reins, a break of which can highlight the 200-DMA of around 0.6175.

NZD/USD struggles to extend the corrective bounce off six-week low. Sluggish sentiment, mixed headlines and US holiday challenge Kiwi pair buyers. RBNZ Shadow Board expects 0.50% rate hike but NZ FinMin cites inflation as the key catalysts. Fed hawks need confirmation from FOMC Minutes, second-tier data. NZD/USD seesaws around 0.6240 as it struggles to push back the bearish bias after a four-day losing streak, keeping the bounce off a six-week low during early Monday morning in Europe. In doing so, the Kiwi pair portrays the traders’ cautious mood ahead of the key Reserve Bank of New Zealand (RBNZ) monetary policy meeting and the Minutes of the latest Federal Open Market Committee (FOMC) Monetary Policy Meeting. Earlier in Asia, the RBNZ's Shadow Board recommended 50 basis points (bps) of an increase in the benchmark cash rate by citing strong inflationary pressures. On the same line could be the latest comments from New Zealand (NZ) Deputy Prime Minister and Finance Minister (FinMin) Grant Robertson who said that the RBNZ has a responsibility to address inflation while also adding, “RBNZ needs to look through current events.” It’s worth noting that the flood in New Zealand joins recent downside economic indicators for the Pacific nation to probe the RBNZ hawks. Also challenging the NZD/USD bulls are the geopolitical fears emanating from the US-China tussles, recently about the Taiwan trade deal with Washington and Beijing’s ties with Russia. On a different page, upbeat US data and mixed comments from the Federal Reserve (Fed) officials seemed to have triggered the NZD/USD pair’s corrective bounce off the multi-day low. Also allowing the Kiwi pair traders to push back the bears is the US holiday. Looking forward, natural calamities and the recent weakness in Auckland’s data may probe the RBNZ hawks. However, this week’s 0.50% rate hike is almost given and may not impress the NZD/USD bulls unless offering hints for further strong rate increases. Following the RBNZ meeting, the Fed Minutes will also be crucial for clear directions as the US central bank officials have recently praised the upbeat data surrounding inflation, Retail Sales and jobs. Technical analysis Sustained downside break of the 200-day Exponential Moving Average (EMA), around 0.6275 by the press time, keeps NZD/USD bears hopeful of breaking the three-month-old support line, close to 0.6220 at the latest.

It’s PMI day, and we think the euro could benefit from the reinforcement of its growth story after a period of few domestic drivers. With the Fed's hawkish rate repricing having gone a long way, we suspect the USD rally may soon run out of steam, even though risk-off may delay a downtrend. Elsewhere, we expect a hawkish 50bp RBNZ hike, but dovish risks have risen Yesterday's visit by President Joe Biden to Kyiv reiterate the now well-established notion that this will be a long war USD: Supported by risk-off mood, but rally looks tired After a very quiet start to the week in FX due to a US holiday, we should start to see some action today. Yesterday’s visit by President Joe Biden to Kyiv and the pledge for more support to Ukraine don’t have clear implications for markets in the near term, but probably reiterate the now well-established notion that this will be a long conflict. The ramifications for the global economy can still be quite deep, especially in neighbouring Europe, but energy prices have been the main transmission channel from the war to the market, and TTF trading around 50 EUR/KWh is allowing markets to turn a blind eye to longer-term risks. We argued in yesterday’s FX Daily how this could be the week where the dollar rally starts losing some steam. The main reason for this is that the recent hawkish rhetoric and strong data have likely been absorbed by now and a further hawkish repricing in Fed rate expectations (currently embedding a 5.40/45% peak rate) is looking increasingly harder. We think that at this stage, it may be mostly down to external factors – like news from Ukraine/China or a general deterioration in risk sentiment – to push the dollar even higher. The key event on the Fed front this week, the FOMC minutes, may not match the hawkish tone we heard after the strong jobs and inflation data released after the meeting. PMIs will be watched in the US like in the eurozone, but the rebound in other surveys already favoured a positive re-rating in US growth expectations and may have set the bar quite high for a major positive surprise to lift the dollar. Still, signs of deterioration in the global risk sentiment this morning suggest today might not be the day for the start of a dollar downtrend, but – equally – we struggle to see DXY extend the recent rally to 105.00 and we could instead witness the start of a decline again towards 102.50-103.00 in the coming days. Francesco Pesole EUR: A reminder of the improved growth outlook The euro has been left without strong domestic drivers on the data front over the past week, so today’s PMIs will be watched quite closely. Consensus is leaning in favour of some modest improvement in both manufacturing and service gauges, and investors might see this as an opportunity to re-enter strategic medium-term long-EUR positions now that the dollar correction seems to be losing momentum. Instability in global risk appetite today may delay the beneficial effects on EUR/USD today, but we still see the balance of risks tilted to the upside for EUR/USD in the coming days, and a return to the 1.0750-1.0800 range seems possible. Elsewhere, it is a very busy week in Sweden. Despite some easing in inflation expectations in the Prospera survey released this morning, yesterday’s core CPIF inflation print came in hotter than expected at 8.7% (rising from 8.4%), and EUR/SEK dropped on expectations of more Riksbank tightening. While this fits our view for a recovery in the krona over the course of the year, we warn against celebrating too early. Remember that the slump in SEK was originally triggered by concerns about the Swedish economic and housing situation, and while more Riksbank tightening helps SEK in the near term, it raises the risks of a black-swan scenario materialising down the road. We think activity data and the outcome of wage negotiations can still generate significant volatility in the krona, and a sustainable move below 11.00 in EUR/SEK still looks premature.   What the Riksbank surely wants is a stronger SEK, and we have now gotten used to hearing references to the currency from many speakers. The minutes from the latest meeting, released yesterday, did all but confirm that there is a strong hawkish direction at the Riksbank. We have long argued how maintaining such rhetoric is likely the best way to navigate the current policy challenges in Sweden. We’d be surprised to hear any dovish hint from the two speakers today (Floden and Ohlsson) or by Governor Erik Thedeen tomorrow.   Francesco Pesole GBP: Looking unlikely to sustainably outperform EUR The PMIs will also be released in the UK this morning, and the consensus seems to be looking at an improving outlook here as well. Still, UK PMIs should continue to fall below the eurozone ones and therefore continue to point to the UK’s relative economic underperformance. Ultimately, we struggle to see the pound consistently strengthening against the euro, especially as we expect the Bank of England to deliver only one last 25bp hike in March, while markets are partly pricing in further tightening after that. EUR/GBP may stay range-bound or climb gradually at this stage. Francesco Pesole NZD: We expect 50bp by RBNZ, but watch the cyclone risk The Royal Bank of New Zealand (RBNZ) announces monetary policy at 0100 GMT tomorrow and we are aligned with the consensus call for a 50bp rate hike – as discussed in our meeting preview. This is its first monetary policy meeting since November, and policymakers will need to take note of the deterioration in activity indicators, inflation having undershot the Bank’s projections, and a housing market that has remained under pressure. All those factors are enough, in our view, to convince the RBNZ to slow the pace of tightening from 75bp to 50bp, but there is probably little advantage in offering dovish signals to the market. Such signals would not just come with a smaller – 25bp hike – but also by revising the peak rate projections lower, which are currently at 5.50% in mid-2023. We have increasing doubts that the 5.50% level will be reached at all (rates are at 4.25% now). Despite the house price correction having largely been in line with RBNZ projections, lower-than-expected inflation would encourage stopping hikes – and hopefully the housing slump – earlier. It is, however, too premature to review those rate projections lower, in our view, at least until there is more conclusive evidence that the disinflation process has started. There is one key risk to our call though: the impact of the cyclone in New Zealand. This has triggered growing speculation that the RBNZ will only hike by 25bp or even pause, and is probably behind the drop in NZD/USD to 0.6200 this morning.  Admittedly, this downside risk has become more material now, but we stick to our call for a hawkish 50bp hike by the RBNZ, and we think this will lift the New Zealand dollar tomorrow. However, we think this may be one of the last times the RBNZ has a direct positive impact on NZD as many factors suggest a dovish pivot will come soon. Francesco Pesole Read this article on THINK TagsNew Zealand dollar FX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

NZD/USD has slipped firmly below 0.6240 as the risk-off market mood has strengthened. Anxiety among investors is soaring ahead of the opening of the US markets after an extended weekend. A promise of a cyclone relief package from NZ Hipkins could propel inflationary pressures further. The NZD/USD pair has slipped below 0.6240 in the early European session. The Kiwi asset is expected to continue its downside movement as anxiety among investors is soaring ahead of the opening of the US markets after an extended weekend. S&P500 futures are showing losses as the US markets are yet to show the impact of US-China tensions. Apart from that, missile launching by North Korea on weekend near Japan’s EEC region event will also be discounted by the market participants. The struggle of the US Dollar Index (DXY) for pushing its auction above 103.70 is intact, at the time of writing. Meanwhile, the 10-year US Treasury yields have trimmed some gains and have slipped to near 3.85%. Investors’ entire focus will remain on the interest rate decision by the Reserve Bank of New Zealand (RBNZ), which is scheduled for Wednesday. February’s monetary policy of RBNZ is extremely important as New Zealand Prime Minister (PM) Chris Hipkins has promised a cyclone relief package of NZ$300 million ($187.08 million). In times, when the New Zealand economy is struggling to tame galloping inflation, the fresh release of the helicopter money carries the potential of propelling inflationary pressures further. The situation is extremely troublesome for RBNZ Governor Adrian Orr as more rates could impact the economic activities ahead. As per the consensus, the RBNZ is expected to announce a hike in the Official Cash Rate (OCR) by 50 basis points (bps) to 4.75%.  

The New Zealand dollar is slightly lower on Tuesday. NZD/USD declined over 0.50% earlier but has pared most of these losses and is trading at 0.6240, down 0.20%. RBNZ expected to hike by 50 bp The Reserve Bank of New Zealand will meet on Wednesday, its first policy meeting this year. The Bank last met in November, at which time it hiked rates by a record 75 basis points, bringing the cash rate to 4.25%. There had been expectations of another 75-bp increase at tomorrow’s meeting, but Cyclone Gabrielle has thrown a monkey wrench into the decision. The cyclone, which caused damage in the billions of dollars, has raised concerns about the economy and the RBNZ is widely expected to lower gears and deliver a 50-bp increase. In the short term, the major disruptions from the cyclone are projected to raise inflation, which is already running at 7.2%, its highest level since 1990. Aside from Gabrielle, there are signs that inflation may have peaked. Inflation Expectations eased in Q1 to 3.3%, down from 3.6% in Q4 2022. Inflation hit 7.2% in the final quarter of 2022, lower than the RBNZ’s forecast of 7.5%. The RBNZ still has its foot on the brake, but if inflation continues to head lower, we can expect the Bank to ease up on the pace of rates in the coming meetings. In the US, we’ll get a look at the February PMI reports. Recent US numbers have beaten expectations, including employment growth, retail sales, and inflation. This is not a complete picture of the economy, as the services and manufacturing sectors have been in contraction territory for months, with readings below the 50.0 level. This negative trend is expected to continue, with Manufacturing PMI expected at 47.3 and Services PMI at 47.2 points. Read next: Baltic Pipe Is Alternative Energy Source For Poland| FXMAG.COM NZD/USD Technical There is resistance at 0.6275 and 0.6357 0.6162 and 0.6080 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

With the appearance of the Double Top pattern and deviations between price movements with the Awesome Oscillator indicator and the DMI indicator (-) which is above and the Moving Average which gives a negative cross, it gives a hint that in the near future, Kiwi has the potential to depreciate downwards to break below the 0.6188 level if If this level is successfully broken down, the NZD/USD has the potential to fall to the level of 0.5738 provided that on the way to these targets there is no upward correction that exceeds the 0.6387 level because if this level is successfully exceeded then all of the downside scenarios described previously will be become invalid and automatically cancel by itself. (Disclaimer)   Relevance up to 04:00 2023-02-27 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/119975

We remain doubtful that the dollar has further to run on the Fed story, and today’s FOMC minutes may struggle to match the recent hawkish Fedspeak. However, a resurgence in geopolitical risk means that defensive USD positions may linger. Elsewhere, the RBNZ 50bp hike was paired with a hawkish tone, but the risk of undershooting rate projections is high In a speech on Tuesday, Putin said Russia would pull out of its last remaining nuclear treaty with the US USD: Helped by geopolitical uncertainty We recently argued that the dollar rally would run out of steam, as the hawkish repricing of Federal Reserve rate hikes has likely peaked, and that external factors would be a more likely cause of further USD appreciation. This has indeed been the case since market action resumed after Monday’s US holiday, as a return of geopolitical risk weighed on global risk assets and buoyed the safe-haven dollar. The focus is now on Russia’s next moves on the Ukraine front ahead of a potentially turbulent anniversary of the invasion, at a time when China – a key ally for Russia – has seen a rapid deterioration in its relationship with the US. An important point is that geopolitical themes had a clear channel with assets through energy prices, and the drop in gas prices observed over the winter has broken that link. This means both that there is room for more geopolitical risk to be priced in, but also that impact should not be as direct and forceful as last year unless energy prices materially bounce back. On other fronts, markets will watch with great interest the content of the FOMC minutes today. We must remember that the 1 February meeting was held before the strong jobs and inflation figures, and crucially before the hawkish repricing in Fed expectations. With markets pricing in close to a 5.50% peak rate, we would essentially need to see evidence that multiple members voiced the desire to hike by 50bp at the start of February. That would back the cause for a 50bp move in March, and likely lift the dollar. However, the bar is set quite high after the recent hawkish comments, and we don’t see a very high chance of a hawkish surprise today. The current instability in the geopolitical picture warrants caution and a bit more support to the dollar may be on the cards, even though we see a good chance that the USD upside correction has peaked. Francesco Pesole EUR: Rebound delayed? Yesterday’s PMIs clearly pointed to an improving picture in the eurozone, and we had previously signalled how the data could have encouraged some to re-enter strategic medium-term euro longs. However, the resurgence of geopolitical risk in Russia/Ukraine is inevitably curbing appetite in the common currency: markets may need to get some reassurance on that before jumping back into EUR/USD longs. We think that, at this stage, support around 1.0640-1.0660 is enough of an encouraging sign for EUR/USD given the strength of the dollar against other pro-cyclical currencies. A hawkish surprise in the FOMC minutes and/or more geopolitical risk being priced in would likely put the 1.0600 support at risk. But unless those two risks materialise, a good Ifo reading in Germany today and stabilisation in sentiment may actually start to favour a move back to 1.0700-1.0750 before the weekend. Francesco Pesole GBP: Enjoying good momentum The pound has continued to display very good resilience despite a re-strengthening in the dollar, this time thanks to very strong PMI readings yesterday. A big (and unexpected) jump from 48.5 into expansionary territory (53.0) in the composite gauge is favouring a re-rating of growth expectations in the UK, which is ultimately translating into rising bets on Bank of England tightening – the biggest driver of GBP performance of late. The OIS pricing for the BoE peak rate has jumped by around 15bp since Monday, and now falls around the 4.55% area - i.e. fully factoring in at least two more hikes. There’s another factor that may play a role here: government borrowing figures for January surprisingly came in £22bn short of the Office for Budget Responsibility’s forecasts. This essentially gives Chancellor Jeremy Hunt plenty more ammunition to deploy fiscal support. The initial impact on the pound from those figures was not positive, but there are reasons to believe this could prove beneficial for GBP further down the road. We are not convinced the BoE will ultimately deliver more than one hike, and given the pound’s high sensitivity to the BoE story, we are struggling to see a sustainable outperformance of sterling against the euro in the coming months. But we have to admit that a break below 0.8800 in EUR/GBP is a tangible possibility in the very near term, and a recovery from those levels (which is our base case) may only be gradual. Francesco Pesole NZD: RBNZ stays hawkish The Reserve Bank of New Zealand's decision overnight was fully in line with our expectations: a 50bp rate hike to 4.75%, a hawkish tone, and unchanged rate projections. The New Zealand dollar is trading stronger after the announcement and press conference by Governor Adrien Orr, but it still seems like the instability in global risk sentiment is putting a cap on NZD/USD gains at the moment. The acknowledgement of slower inflation and a subdued economic outlook were included in the statement, as well as an analysis of the potential impact on growth (negative) and inflation (positive) of cyclone Gabrielle. Ultimately, the reiteration that the monetary policy strategy has a medium-term horizon was clearly aimed at detaching market rate expectations from such short-term events. Interestingly, the new RBNZ projections included an even larger (and longer-lasting) slump in the housing market. This seems to us another attempt to sound hawkish and to re-link the market pricing with the 5.50% projected peak rate, as the housing correction appeared to many – including us – as the main reason to stop hiking earlier. We still think there is a high risk that the 5.50% peak rate will not be reached unless the impact of the cyclone effectively stops the deflationary process. Markets are pricing in 35bp for the 5 April meeting: it’s important to note that there are no key data releases except 4Q GDP before that date. A 25bp increase looks more likely, but we wouldn’t exclude one last 50bp move before data deteriorate in the second quarter. This means that the RBNZ could offer support to NZD into the start of 2Q, but we then think that a worsening in data and slower inflation should leave further NZD/USD upside heavily dependent on a favourable external environment. We still target 0.67 by the third quarter. Francesco Pesole Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

NZD/USD is demonstrating a volatility contraction ahead of Federal Open Market Committee minutes. A recovery in the odds of policy tightening continuation by the Federal Reserve sent US Treasury yields on fire. Reserve Bank of New Zealand has hiked its Official Cash Rate by 50 bps to 4.75%. NZD/USD might display a sheer downside after surrendering the horizontal support plotted from 0.6190. NZD/USD has turned sideways around 0.6230 in the early European session after wild movements showed post-hawkish monetary policy by the Reserve Bank of New Zealand (RBNZ). Volatility in the Kiwi asset has squeezed dramatically as investors have shifted their focus towards the release of the Federal Open Market Committee (FOMC) minutes, which are scheduled in the late New York session. Investors’ risk-taking ability is improving gradually as the risk-sensitive assets have shown some recovery after observing sheer weakness on Tuesday. S&P500 futures have added some gains after recording the worst day of 2023. The US Dollar Index (DXY) is gradually marching towards 103.90. Weak momentum in the USD index could spoil the upside bias ahead. However, investors are expected to remain anxious ahead of the release of the FOMC minutes. US yields print a three-month high after upbeat PMI figures The tight labor market and solid monthly Retail Sales released this month already triggered fears of a rebound in the declining Consumer Price Index (CPI) in the United States. And, now upbeat preliminary S&P PMI (Feb) data have bolstered the case of a sheer revival in consumer spending. On Tuesday, the preliminary S&P Manufacturing PMI (Feb) climbed to 47.8 from the consensus of 47.3 and the former release of 46.9. The Services PMI soared to 50.5 from the estimates of 47.2 and the prior release of 46.8. Economic activities in the United States were contracting in the past three months and investors started anticipating that the Federal Reserve (Fed) would consider a pause in the policy tightening spell this month. However, Fed chair Jerome Powell was reiterating that inflation is persistent and it would be premature to consider a pause or rate cut in the current monetary policy. Now, a sheer expansion in the scale of economic activities is conveying that the current monetary policy is not restrictive enough to tame stubborn inflation. A recovery in the odds of policy tightening continuation by the Federal Reserve sent US Treasury yields on fire. The return generated on 10-year US Treasury bonds printed a fresh three-month high at 3.96%. Federal Open Market Committee minutes hog the limelight Investors are keenly awaiting the release of the Federal Open Market Committee (FOMC) minutes, which will provide a detailed explanation behind the 25 basis points (bps) interest rate hike by the Federal Reserve in its February monetary policy meeting. Apart from that, the minutes will determine what authorities are planning for the terminal rate and targets decided for inflation for the current year and a roadmap for achieving the 2% inflation target. Recently, Cleveland Fed President Loretta Mester and St. Louis Fed President James Bullard have advocated for another 50 basis-point hike, which should be on the table for upcoming decisions, as reported by Bloomberg. A strong consideration for 50 bps rates might propel recession fears in the United States. Reserve Bank of New Zealand hikes OCR by 50 bps to 4.75% Inflationary pressures in the New Zealand economy have not peaked yet as the domestic demand is extremely solid. And Cyclone Gabrielle, considered as the worst storm, has created havoc that the price index could propel further. To strengthen the monetary tools in the battle against inflation, the Reserve Bank of New Zealand has hiked its Official Cash Rate (OCR) by 50 bps to 4.75%. In November monetary policy, Reserve Bank of New Zealand Governor Adrian Orr pushed interest rates by 75 bps. A bumper rate hike was already expected by the RBNZ amid the fresh release of the helicopter money as New Zealand Prime Minister (PM) Chris Hipkins has promised a cyclone relief package of NZ$300 million ($187.08 million). Meanwhile, the labor market has started demonstrating devastating effects due to the continuation of policy tightening by the Reserve Bank of New Zealand. In the monetary policy statement, Reserve Bank of New Zealand Governor Adrian Orr was loud and clear that the economy will see a recession in the period of nine to twelve months. He further added, “The central bank is encouraging savings by increasing deposit rates to avert inflation”.  The central bank sees no evidence that inflation targets should be raised. NZD/USD technical outlook NZD/USD has been declining for the past few weeks after forming a Double Top chart pattern on a four-hour scale, which conveys a bearish reversal. The Kiwi asset has dropped to near the horizontal support plotted from January 6 low at 0.6190. A slippage below the above-mentioned horizontal support will trigger the downside momentum. The 20-period Exponential Moving Average (EMA) at 0.6242 is acting as a major barricade for the New Zealand Dollar. Meanwhile, the Relative Strength Index (RSI) (14) is on the verge of slipping into the bearish range of 20.00-40.00. An occurrence of the same will trigger a downside momentum.

The New Zealand dollar jumped after the Reserve Bank of New Zealand meeting but has pared most of these gains. In the European session, NZD/USD is almost unchanged at 0.6216. RBNZ hikes by 50 basis points The RBNZ delivered a 50 bp rate increase today, bringing the cash rate to 4.75%, its highest level since 2009. The move was widely expected, but a hawkish tone from the central bank gave the New Zealand dollar a brief boost. The rate statement noted that while there are signs that inflationary pressures are easing, CPI remains too high. The statement said that the cash rate “still needs to increase” in order to get inflation back to the Bank’s target of 1%-3%. There is plenty of life left in the RBNZ’s rate-tightening cycle, as the central bank has forecast a peak rate of 5.5% later this year. The next rate meeting is in April, and as things stand, we can expect another 50-bp hike at that time. Inflation is running at a 7.2% clip and a 75-bp hike was a strong possibility at today’s meeting before Cyclone Gabrielle hit and caused damage in the billions of dollars. This is expected to dampen growth in the slow term, although the rebuild should boost inflation. In the US, Manufacturing PMI was almost unchanged at 47.8, while Services PMI improved to 50.5, an 8-month high. The 50.0 level separates contraction from expansion, and both services and manufacturing have been in decline for months, as high inflation and rising interest rates have dampened activity in these sectors. The Fed will release the minutes of its February meeting, when it delivered a 25-basis point hike. The markets will be interested in the extent of support for a 50-bp hike at the meeting. The blowout employment report and a strong retail sales release have forced the markets to come closer to the Fed’s stance, and there is now talk of more rate hikes this year, when only a few weeks ago the markets were confidently projecting rate cuts in late 2023. Read next: Sweden And Finland Are Getting Closer To Becoming NATO Members| FXMAG.COM NZD/USD Technical There is resistance at 0.6245 and 0.6357 0.6162 and 0.6049 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

NZD/USD has displayed a sheer recovery to near 0.6250 as the risk-on mood solidifies. The Kiwi asset is attempting to deliver a breakout of the Symmetrical Triangle. The RSI (14) is on the verge of delivering a break into the bullish range of 60.00-80.00. The NZD/USD pair has recovered dramatically after sensing a buying interest around 0.6210 in the Asian session. The Kiwi asset has extended its recovery to near 0.6250 after a responsive buying action and is looking to drive its range extension further as the risk-on impulse has solidified. Investors have digested the fact that galloping inflation in the United States needs immediate treatment, therefore, the Federal Reserve (Fed) cannot pause the policy tightening spell as it could dampen the efforts yet made to bring it down. The US Dollar Index (DXY) is resisting in continuing the downside further after correcting to near 104.00. However, the positive market sentiment could continue sending pressure on the safe-haven assets. NZD/USD is attempting to deliver a breakout of the Symmetrical Triangle chart pattern that indicates a sheer volatility contraction on an hourly scale. The downward-sloping trendline of the above-mentioned chart pattern is placed from February 20 high at 0.6262 while the upward-sloping trendline is placed from February 17 low at 0.6204. The Kiwi asset has successfully shifted its auction above the 50-period Exponential Moving Average (EMA) at 0.6233, which indicates more upside ahead. Meanwhile, the Relative Strength Index (RSI) (14) is on the verge of delivering a break into the bullish range of 60.00-80.00, which will trigger the upside momentum. For further upside, the Kiwi asset needs to surpass January 8 low at 0.6272, which will drive the asset towards January 9 low at 0.6320, followed by February 7 high at 0.6363. Alternatively, a breakdown of January 6 low at 0.6193 will drag the asset toward November 28 low at 0.6155. A slippage below the latter will expose the asset for more downside toward the round-level support at 0.6100. NZD/USD two-hour chart  

The New Zealand dollar remains in calm waters, with little reaction to the Reserve Bank of New Zealand’s rate hike or the FOMC minutes. The RBNZ raised rates by a half-point on Wednesday, as the central bank remains aggressive in its battle to curb inflation. The move was in line with expectations and the New Zealand dollar moved higher but quickly pared those gains. The increase brings the cash rate to 4.75%, its highest level since 2009. With inflation running at a 7.2% clip, the RBNZ will have to keep raising rates until there is clear evidence that inflation has peaked. There was a strong possibility that the RBNZ would deliver a second straight hike of 0.75%, but Cyclone Gabrielle, which caused massive damage, led the bank to opt for a more modest hike of 0.50%. RBNZ Governor Orr said that it was too early to assess the monetary policy implications of Gabrielle but Orr noted that the rebuilding efforts would add to inflationary pressures. The rate statement was crystal clear with regard to future policy. The statement said although there are signs of inflation falling, the core rate and inflation expectations are too high and “monetary conditions need to tighten further” in order to bring inflation back down to the target of 1%-3%. FOMC says more hikes needed The FOMC minutes sounded a lot like the RBNZ statement, with Fed policy makers saying that there were signs that inflation had eased but more rate hikes were needed to lower inflation back to the 2% target. The minutes noted that the labour market remains robust, which is contributing to continuing upward pressures on wages and prices.” The Fed meeting took place before the blowout January employment report, and concerns over a hot labour market will be even more amplified. An important takeaway from the minutes is that although the vote to hike by 0.25% was unanimous, two members (Bullard and Mester) saw a case for a 0.50% increase. The Fed has been consistent in its hawkish stance, and what has changed over the past few weeks is that market pricing is more aligned with the Fed, with the markets no longer projecting a rate cut late in the year. Still, market pricing could shift again if the next batch of key data weakens ahead of the March 22 meeting. Read next: Tesla Opens Its Global Engineering Headquarters In Palo Alto, California| FXMAG.COM NZD/USD Technical There is resistance at 0.6275 and 0.6357 0.6162 and 0.6080 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

NZD/USD is sensing heat in climbing above the 0.6240 resistance despite a firmer appeal for risk-sensitive assets. A promise of a cyclone relief package by NZ PM Hipkins in an already inflated environment will worsen the situation further. An upbeat US labor market and consumer spending could propel the US PCE Inflation data. The NZD/USD pair is facing barricades in overstepping the immediate resistance of 0.6240 in the Tokyo session. Earlier, the Kiwi asset displayed a solid rebound from the round-level support of 0.6200 as investors shrugged off hawkish Federal Reserve (Fed)-inspired volatility. The asset is likely to remain directionless as investors are awaiting the release of the United States Personal Consumption Expenditure (PCE) Price Index for fresh cues. The US Dollar Index (DXY) is demonstrating signs of volatility contraction amid a mixed market mood. The recovery moves from the risk-sensitive assets are bizarre in comparison with the price action by the USD Index. S&P500 futures have recovered their entire losses as investors have stopped worrying about higher rates by the Fed for a longer period in its battle against persistent inflation. Accordingly, the 10-year US Treasury yields have dropped further below 3.87%. The recent promise of a cyclone relief package by the New Zealand Prime Minister (PMI) Chris Hipkins has set inflation projections on fire. It is worth noting that the New Zealand economy is already suffering from galloping inflation and now further inducement is making the inflation situation more vulnerable. Regarding interest rate projections, Reserve Bank of New Zealand (RBNZ) Assistant Governor, Karen Silk cited “The projected cash rate peak is not set in stone.” He further added that all rate hike options are on the table for the April meeting and the RBNZ will do all it takes to control inflation. The week is expected to end with a power-pack action propelled by the release of US PCE Inflation data. The street is expecting a rebound in the price pressures as the US labor market is getting stronger each day and households’ spending has recovered dramatically.  

NZD/USD drops to the lowest levels in three months, grinds near intraday low of late. Downbeat NZ Retail Sales, comments from RBNZ’s Conway keep bears hopeful. US Dollar cheers strong inflation clues, hawkish Fed talks amid upbeat yields. US Durable Goods Orders, risk catalysts eyed for fresh impulse. NZD/USD bears keep the reins at the lowest levels since November 2022, down half a percent near 0.6130 during early Monday, as downbeat New Zealand (NZ) catalysts contrast with the US Dollar demand. That said, NZ Retail Sales marked -0.6% QoQ figure for the fourth quarter (Q4) earlier in the day, versus 1.5% expected and 0.4% prior. On the other hand, Reserve Bank of New Zealand (RBNZ) Chief Economist Paul Conway said, “As interest rates rise, I expect consumption to slow.” Meanwhile, strong US inflation-linked data joined the Fed policymakers’ support for higher rates to propel the Fed fund futures to above 5.30%, versus 5.10% expected by the US central bank in December. The same joins the latest bout of sanctions on Russia from the West to escalate the market’s fears of more geopolitical tension, which in turn underpins the US Dollar’s haven demand. US Dollar Index (DXY) renews its intraday high around 105.32 following the initial pullback from a seven-week high, while tracing upbeat US Treasury bond yields. It’s worth noti Read next: The Effect Of Shifting The Aggregate Demand Curve - Demand Shocks| FXMAG.COM ng, US 10-year Treasury yields reverse the early-day losses to around 3.95%. Further, the two-year counterparts jump back towards the highest levels since November 2022, marked the previous day, as bond bears poke the 4.83% level by the press time. Further, the S&P 500 Futures lick its wounds with mild gains after the Wall Street benchmark posted the biggest weekly slump of 2023.   Moving ahead, the US Durable Goods Orders for January, expected -4.0% versus 5.6% prior, will be important to watch for clear directions ahead of Wednesday’s official activity data from China. Technical analysis A daily closing below the 200-DMA, around 0.6170 by the press time, directs NZD/USD bears towards July 2022 low near 0.6060.

The New Zealand dollar has extended its losses on Monday, after a dismal end to the week. In the European session, NZD/USD is trading at 0.6151, down 0.20%. Earlier, NZD/USD touched a low of 0.6131, its lowest level since Nov. 23. The US dollar flexed its muscles against the majors on Friday, courtesy of a sharp rise in the US personal consumption expenditures price index (PCE), the Fed’s preferred inflation indicator. Headline PCE inflation climbed 0.6% m/m in January, up from 0.2% in December and above the estimate of 0.5%. Core PCE inflation also rose 0.6% m/m, above the December reading of 0.4%, which was also the forecast. As well, Personal Spending in January surged 1.8%, compared to -0.1% in December and an estimate of 1.3%. The uptake from the better-than-expected inflation and consumer data is that the economy remains resilient and the Fed may have to raise rates even higher, perhaps closer to 6%. The markets have quickly shifted from expecting a hold in rate cuts to pricing three more rate increases this year, and the US dollar is showing gains on expectations that more rate hikes are coming.  Following the PCE release, Fed member Mester said she wasn’t surprised by the strong numbers and said that the Fed needed to do more to put inflation on a “sustainable downward path to 2%”. New Zealand retail sales decline In New Zealand, retail sales for Q4 disappointed at -0.6% q/q, down from an upwardly revised 0.6% reading in Q3 and shy of the estimate of 1.5%. This marks the third decline in four quarters. The core rate fell by 1.3%, compared to an upwardly revised 0.6% in Q3 and an estimate of 1.5%. The central bank remains in aggressive mode and raised rates by 0.50% last week, bringing the cash rate to 4.75%. The decline in retail sales signals that the extensive tightening is taking a bite out of economic activity, which is necessary in order for inflation to decline. Read next: BNP Paribas Sued For Providing Financial Services To Companies That Allegedly Contribute To Deforestation Of The Amazon Rainforest| FXMAG.COM NZD/USD Technical 0.6124 is under pressure in support. Below, there is support at 0.6049 0.6193 and 0.6245 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

NZD/USD is exposed to 0.6130 after retreating from 0.6180 as the risk-on mood has faded. The 10-year US Treasury yields have jumped above 3.93% amid rising fears of more rates by the Fed. Investors are expecting an increase in the Caixin Manufacturing PMI to 50.2. The NZD/USD pair delivered a downside break of the sideways auction formed in a range of 0.6160-0.6182 in the Asian session. The Kiwi asset has now slipped further and is declining towards 0.6130 in the early European session as the risk-on profile has retreated after a recovery move. The US Dollar Index (DXY) has extended its revival move to near 104.50 as galloping consumer spending from households in the United States economy is bolstering the case of continuation of policy tightening by the Federal Reserve (Fed). S&P500 futures have surrendered their entire gains added in the Asian session, portraying a sheer recovery in the risk aversion theme. Also, the 10-year US Treasury yields have jumped above 3.93%. Bearish bets for the New Zealand Dollar are escalating as investors are getting anxious ahead of the release of the Caixin Manufacturing PMI (Feb) data, which will release on Wednesday. Investors are expecting an increase in the PMI figures to 50.2 from the former release of 49.2. The reopening of the Chinese economy with a promising economic outlook due to fiscal stimulus has backed bullish bets for the Caixin PMI data. It is worth noting that New Zealand is one of the leading trading partners of China and higher manufacturing activities will also strengthen the New Zealand Dollar. Inflationary pressures in the New Zealand economy could decelerate ahead as retail demand has dropped firmly. The Retail Sales data for the fourth quarter of CY2022 has contracted by 0.6% while the street was expecting an expansion of 1.5%. This might provide some relief to the Reserve Bank of New Zealand (RBNZ).

NZD/USD has printed a fresh day low at 0.6222 amid the risk-off mood. A mean reversion to near 50-EMA is offering a bargain buy to investors. The RSI (14) is expected to find a cushion around 40.00. The NZD/USD pair has refreshed its day low at 0.6222 in the early European session. The Kiwi asset has sensed pressure and soaring US yields have dampened the market mood. The 10-year US Treasury yields have jumped to near 4.03% and are showing no signs of exhaustion yet. S&P500 futures have tumbled in the Asian session as investors are worried about the recession situation in the United States economy, considering the fact that the Federal Reserve (Fed) will push rates above 5% and will keep them steady beyond 2023. The US Dollar Index (DXY) has refreshed its day high above 104.70 amid the risk-off market mood. NZD/USD has corrected to near the 50-period Exponential Moving Average (EMA) at around 0.6223 after failing to extend its bullish reversal above the horizontal resistance placed from February 21 high at 0.6263 on an hourly scale. A scrutiny of the Relative Strength Index (RSI) (14) indicates that the momentum oscillator has already delivered a bullish reversal. The oscillation range of the RSI (14) has already shifted to 40.00-80.00. Therefore, the momentum indicator is expected to find a cushion at 40.00. The Kiwi asset is offering a buying opportunity near the 50-EMA at 0.6223, which could push the major toward March 1 high at 0.6276 followed by the round-level resistance at 0.6300. In an alternate scenario, a breakdown of January 6 low at 0.6193 will drag the asset toward November 28 low at 0.6155. A slippage below the latter will expose the asset for more downside toward the round-level support at 0.6100. NZD/USD hourly chart  

NZD/USD fades bounce off three-month low, holds lower ground of late. Bearish MACD signals join failure to cross the convergence of 100-SMA, one-month-old resistance line to lure sellers. Fortnight-long horizontal support area restricts immediate downside ahead of February’s low. NZD/USD remains depressed around 0.6210 as it pares the previous week’s gains, the first in five, heading into Monday’s European session. In doing so, the Kiwi pair portrays the bear’s dominance between the key trading area between the 0.6245-50 resistance confluence and 0.6200-6190 support zone. That said, the bearish MACD signals join the pair’s failure to cross the 0.6245-50 resistance confluence, including the 100-bar Simple Moving Average (SMA) and a one-month-long descending resistance line, to keep sellers hopeful. However, multiple levels marked since late February could challenge the NZD/USD pair’s immediate downside around 0.6200-6190. Should the quote remains weak past 0.6190, the odds of witnessing a quick drop to the previous monthly low of 0.6131 can’t be ruled out. Though, July 2022 low of 0.6060 and the 0.6000 psychological magnet could restrict the pair’s further downside. Alternatively, a successful break of the 0.6250 hurdle becomes necessary to direct the NZD/USD buyers toward the 200-SMA hurdle of 0.6335. Following that, the mid-February high surrounding 0.6390 and the 0.6400 round figure could become important to watch for the bulls. Overall, NZD/USD is likely to grind lower and advocates further volatility. NZD/USD: Four-hour chart Trend: Limited downside expected

NZD/USD grinds higher around intraday top, stays firmer past the key supports. Upbeat MACD, RSI signals hint at the Kiwi pair’s further run-up. One-month-old horizontal resistance area challenges bulls; 200-DMA restricts immediate downside. NZD/USD seesaws around intraday high near 0.6210, up 0.40% on a day, as bulls cheer the previous day’s inability to conquer the 200-DMA support amid early Tuesday. In doing so, the Kiwi pair buyers also benefit from the upbeat oscillators while heading into a short-term key resistance. A looming bullish cross on the MACD joins the RSI (14) rebound towards the 50 line to underpin the hopes of the NZD/USD pair’s further recovery. However, a horizontal area comprising multiple levels marked since early February, near 0.6270-75, appears a tough nut to crack for the Kiwi pair buyers to cross for conviction. Following that, a run-up towards the mid-February swing high near 0.6390, quickly followed by the 0.6400 threshold, can’t be ruled out. On the flip side, the 200-DMA support level of 0.6165 restricts short-term declines of the NZD/USD pair. Even if the Kiwi prices drop below 0.6165 DMA support, the previous resistance line from early February, near 0.6130 at the latest, could challenge the bears. It’s worth noting that the 0.6130 level also becomes important as it encompasses the previous monthly low. Should the NZD/USD bears remains weak past 0.6130, the odds of witnessing a slump toward the mid-November 2022 low near 0.6060 can’t be ruled out. NZD/USD: Daily chart Trend: Sideways

NZD/USD languishes near its lowest level since November amid sustained USD buying. The USD remains pinned near a multi-month top amid bets for aggressive Fed rate hikes. The prevalent risk-off environment further acts as a headwind for the risk-sensitive Kiwi. The NZD/USD pair seesaws between tepid gains/minor losses, around the 0.6100 mark through the early European session and consolidates its recent decline to the lowest level since November 17 touched earlier this Wednesday. The US Dollar builds on the previous day's blowout rally led by more hawkish remarks by Federal Reserve Chair Jerome Powell and climbs to a fresh multi-month top, which, in turn, is seen acting as a headwind for the NZD/USD pair. Powell surprised investors and raised the possibility of larger rate hikes to tackle sticky inflation. In the prepared remarks for the semi-annual congressional testimony, Powell warned that interest rates might need to go up faster and higher than previously anticipated. The markets were quick to react and started pricing in a greater chance of a 50 bps lift-off at the March FOMC policy meeting, which remains supportive of elevated US Treasury bond yields. In fact, the yield on the benchmark 10-year US government bond is holding steady near the 4.0% threshold and the rate-sensitive two-year Treasury note stands tall near its highest level since 2007, which, along with a fresh wave of the global risk-aversion trade, continues to lend support to the safe-haven USD. The market sentiment remains fragile amid worries about economic headwinds stemming from rapidly rising borrowing costs. Adding to this, fading optimism over a strong Chinese economic recovery, along with US-China tensions, temper investors' appetite for perceived riskier assets. This is evident from a sea of red across the equity markets, which further benefits the Greenback's status as the global reserve currency and contributes to capping any meaningful upside for the risk-sensitive Kiwi. That said, the extremely oversold Relative Strength Index (RSI) on hourly charts helps limit losses for the NZD/USD pair, at least for the time being. Nevertheless, the fundamental backdrop seems tilted firmly in favour of bearish traders and suggests that the path of least resistance for spot prices is to the downside. Hence, any attempted recovery move is more likely to get sold into and runs the risk of fizzling out rather quickly. Investors look forward to the US macro data for a fresh impetus. Wednesday's US economic docket features the release of the ADP report on private-sector employment and JOLTS Jobs Opening data later during the early North American session. This, along with the US bond yields and Powell's second day of testimony before the House Financial Services Committee, will drive the USD demand. Apart from this, the broader risk sentiment should influence the NZD/USD pair and allow traders to grab short-term opportunities.

NZD/USD seesaws around intraday high while keeping the bounce off 3.5-month low. 50-HMA, two-week-old horizontal resistance area restrict immediate run-up inside short-term bullish channel. Oscillators suggest slower grind towards the north but buyers need validation from 0.6200. NZD/USD pares weekly losses around 0.6120 amid the early Thursday morning in Europe. In doing so, the Kiwi pair prints mild gains while snapping the previous three-day downtrend, as well as keeping the early-day rebound from the lowest levels since November 17, 2022. While portraying the quote’s latest rebound, an ascending trend channel from Tuesday gains major attention. That said, the NZD/USD price currently pokes a convergence of the fortnight-long horizontal resistance area, as well as the 50-Hour Moving Average (HMA), around 0.6130 by the press time. It’s worth noting, however, that the bullish MACD signals and the recently firmer RSI (14) hint at the Kiwi pair’s further recovery, which in turn highlights the stated bullish channel’s top line near 0.6140. In a case where the NZD/USD price remains firmer past 0.6140, a downward-sloping resistance line from March 01, close to 0.6195 by the press time, lures the buyers, a break of which could quickly propel the quote towards the monthly high of 0.6277. On the flip side, a clear break of the stated bullish channel’s bottom line, around the 0.6100 round figure, could trigger a south-run targeting the 0.6000 psychological magnet. Though, the early September 2022 low near 0.5995 can act as an extra filter towards the south. Overall, NZD/USD remains on the bear’s radar despite the latest corrective bounce. NZD/USD: Hourly chart Trend: Limited recovery expected

NZD/USD fades bounce off the lowest levels since late November 2022, grinds lower of late. 50-EMA pierces 200-EMA from above to portray death cross suggesting further downside of the Kiwi pair. Oversold RSI conditions, lows marked during mid-November challenge bears. Buyers need a successful break of 0.6265 to retake control. NZD/USD extends the previous day’s pullback from mid-0.6100s as bears flirt with the 0.6100 threshold during early Friday.  In doing so, the Kiwi pair justifies Thursday’s failure to cross the late February swing low. That said, the 50-bar Exponential Moving Average (EMA) pierces the 200-EMA from above and portrays the death cross, which in turn suggests further downside of the NZD/USD. However, the RSI (14) line is oversold and hence, lows marked during mid-November 2022, around 0.6060, may act as strong support for the NZD/USD bears to watch. In a case where the Kiwi pair refrains from bouncing off 0.6060 support, it becomes vulnerable to drop towards the early November 2022 peak surrounding the 0.6000 psychological magnet. Alternatively, a downward-sloping resistance line from February 14, close to the 0.6200 round figure, seems to challenge the NZD/USD pair’s immediate recovery. It’s worth noting, though, that a convergence of the 50-EMA and 200-EMA, around 0.6265, appears a tough nut to crack for the NZD/USD bulls, a break of which could trigger a run-up targeting the mid-February swing high near 0.6390. Overall, NZD/USD is likely to decline further but the room towards the south appears limited. NZD/USD: Daily chart Trend: Further downside expected

The Reserve Bank of New Zealand (RBNZ) could hike rates less than expected but the NZD/USD pair is still seen higher over the coming months, economists at ING report.  RBNZ pivot may not come in April “The RBNZ continued to delay their dovish pivot. There is a good probability that April won’t see a pivot either. What will tilt the balance on the dovish side for the RBNZ, in our view, will be the disinflation process (which may well start earlier than they are projecting) and/or property market weakness rather than well-telegraphed evidence of a recessionary environment.” “We expect the RBNZ to end up short of their projected 5.50% peak rate, but that should not prevent NZD to touch 0.66 in 2H23.” “NZD/USD – 1M 0.62 3M 0.64 6M 0.66 12M 0.67”

NZD/USD holds lower ground near intraday low, snaps two-day winning streak. RSI retreat backs the Kiwi pair’s U-turn from 200-EMA, one-month-long resistance line. Receding bullish bias of MACD signals, failure to cross key upside hurdles keep sellers hopeful. Fortnight-old horizontal support area lures bears past 100-EMA break. NZD/USD sticks to mild losses near 0.6210 during the first downbeat day in three heading into Tuesday’s European session. In doing so, the Kiwi pair struggles to break the 100-bar Exponential Moving Average (EMA) amid sluggish trading hours. That said, the quote rose the most in nine weeks the previous day before retreating from 0.6265. The pullback moves could be linked to the NZD/USD pair’s inability to cross the 200-bar EMA, as well as a downward-sloping resistance line from mid-February. Adding strength to the pullback moves could be the RSI (14) retreat from the overbought territory, as well as the receding bullish bias of the MACD signals. It’s worth noting, however, that a clear downside break of the 100-bar EMA, around 0.6200 by the press time, becomes necessary for the NZD/USD bears to take control. Following that, a south-run towards the two-week-old horizontal support zone near 0.6130 and then to the monthly low of 0.6084 can’t be ruled out. On the contrary, the aforementioned trend line and 200-EMA restrict short-term NZD/USD recovery to around 0.6230 and 0.6245 in that order. In a case where NZD/USD remains firmer past 0.6245, the odds of witnessing a rally targeting the mid-February high of 0.6390 can’t be ruled out. NZD/USD: Four-hour chart Trend: Further downside expected