NZD/USD rises further on the back of risk appetite, moves away from 0.6500
- Kiwi supported by risk sentiment after Draghi’s comments and Trump’s tweet.
- Greenback drops versus commodity and EM currencies, holds to gains versus Euro.
- Data ahead: NZ Current Account and FOMC meeting.
NZD/USD extends the rebound from below 0.6500
Earlier today the pair bottomed at 0.6488 and again rebounded from near the 0.6485 area, setting a potential short-term double bottom. During the American session rose further, broke above 0.6513 (June 17 high) and recently printed a fresh daily high at 0.6536.
As of writing trades at 0.6530, up 25 pips from yesterday’s close, supported by the rally in equity prices. The DOW JONES is up 1.35% and the S&P 500 1.15%. European indexes ended with gains of 2% on average. The rally started after dovish comments from Mario Draghi and it was reinforced after Trump announced he talked with Xi Jinping and plans an extended meeting.
The improvement in risk sentiment moved US yields away from the lows, giving some support to the greenback that rebounded versus the yen and held to gains against the Euro. But the Dollar weakened versus the high yielding space, including the Kiwi and the Aussie.
Market participants are starting to focus on the FOMC statement. Today the Fed started its 2-day meeting. The decision will be announced tomorrow. No change is expected in rates but the statement and Powell’s words will be followed closely for clues about the possibility of a rate cut.
This article is published only for general use basic informatory purposes and should not be considered or depended on as a financial or investment advice. Investors should make sure that they understand the risks and seek independent financial advice at all times. CFDS ARE COMPLEX INSTRUMENTS AND COME WITH A HIGH RISK OF LOSING MONEY RAPIDLY DUE TO LEVERAGE.