July 28, 2022 22:45 GMT
NZD/USD crept higher Thursday as the kiwi outperformed its commodity-tied peers, while the greenback was weighed on by the withdrawal of hawkish Fed bets.
- Participants dialled down expectations of super-aggressive monetary tightening in the wake of Wednesday's FOMC policy review, which was reinforced by Thursday's U.S. GDP data showing a second consecutive quarterly contraction.
- A soft retail sales reading in Australia raised questions about the RBA's tightening trajectory, possibly applying some pressure to AUD/NZD.
- The aggregate Bloomberg Commodity Index started on a firmer footing but then eased off in NY hours.
- NZD/USD last trades flat at $0.6289, with bulls looking to a break above the 50-DMA/Jun 24 & 27 highs at $0.6309/27. This would shift focus to resistance from Jun 16 high of $0.6396. On the flip side, a dip through Jul 14 low of $0.6061 would reinstate bearish momentum.
- New Zealand's consumer confidence index in the ANZ-Roy Morgan survey released this morning climbed to 81.9 in July from 80.5 recorded in June. ANZ noted that the index remained at a "very low" level, with "the proportion of people who believe it is a good time to buy a major household item (...) unwinding half of the previous month's bounce." On the bright side, inflation expectations fell to +4.9% Y/Y, the lowest level in a year.
- The main highlight of next week's data docket will be the quarterly labour force survey, due for release on Wednesday. It will be one of the final notable data inputs ahead of the RBNZ's August 17 MPS.