NZD/USD moves away from monthly peak, slides to 0.6200 on modest USD strength – Crypto News – Crypto News
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NZD/USD faces barricades around 0.6180 as investors await Jackson Hole NZD/USD faces barricades around 0.6180 as investors await Jackson Hole

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NZD/USD moves away from monthly peak, slides to 0.6200 on modest USD strength – Crypto News

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  • NZD/USD meets with some supply and stalls a four-day winning streak to the monthly peak.
  • The Fed’s hawkish outlook, along with a softer risk tone, benefits the USD and exerts pressure.
  • Investors now look to Fed Chair Jerome Powell’s testimony for a fresh impetus later this week.

The NZD/USD pair attracted some sellers near the 0.6235 region on Monday and extended its steady intraday descent through the Asian session, snapping a four-day winning streak. Spot prices retreat further from the monthly peak touched on Friday and drop to the 0.6200 round-figure mark, or a fresh daily low in the last hour.

The US Dollar (USD) gains some positive traction for the second straight day in the wake of the Federal Reserve’s (Fed) hawkish Outlook and turns out to be a key factor exerting some pressure on the NZD/USD pair. It is worth recalling that the Fed last week decided to leave interest rates unchanged, though signaled that borrowing costs may still need to rise by as much as 50 bps by the end of this year. Apart from this, a generally softer tone around the equity markets further benefits the safe-haven buck and drives flows away from the risk-sensitive Kiwi.

Concerns about a global economic downturn, particularly in China, overshadow hopes for additional rate cuts by the People’s Bank of China (PBoC) and continue to weigh on investors’ sentiment. Apart from this, the Reserve Bank of New Zealand’s (RBNZ) explicit signal that it was done with its most aggressive hiking cycle since 1999 further undermines the New Zealand Dollar (NZD). That said, expectations that the fed is nearing the end of its year-long policy tightening might cap gains for the USD and help limit losses for the NZD/USD pair.

Traders might also refrain from placing aggressive bets and prefer to wait on the sidelines ahead of Fed Chair Jerome Powell’s two-day congressional testimony on Wednesday and Thursday. Investors will look for fresh cues about the Fed’s future rate-hike path, which will play a key role in influencing the near-term USD price dynamics and provide some meaningful impetus to the USD/NZD pair. This, in turn, makes it prudent to wait for strong follow-through selling before confirming that the recent move-up witnessed over the past three weeks or so has run out of steam.

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