February 01, 2023 21:23 GMT
Greenback Offered As Powell Acknowledges Disinflation
NZD/USD prints at $0.6496, ~0.9% firmer in yesterday's trading.
- The Fed raised interest rates by 25bps as expected yesterday, Fed Chair Powell noted progress against inflation had been made, warning additional hikes are necessary. Risk assets were bid as he said "disinflation process has started", and he didn't comment on the recent easing of financial conditions.
- NZD/USD rallied ~1.4% from pre Powells press conference having earlier found support below its 20-day EMA.
- Resistance was seen above $0.65, with the pair marginally paring gains to deal at current levels.
- Cross asset flow saw a move towards risk. S&P500 was up 1.1% and the DXY was ~0.9% softer. US Treasury Yields fell, 10 year yield was down -10bps.
- Despite the post-Powell rally we are still consolidating in tight ranges. Bulls have to first break $0.6530, bears look to sustain a break of the 20-day EMA at $0.6430.
- On the wires shortly we have Dec Building Permits.