NZD/USD Posts 4 Month High, Before A Cautious Powell Causes A Reversal

The Kiwi finished Wednesday trading up 0.68% at 0.6186, while the BBDXY closed the session down 0.19% at 1,263.35. The pair has been in an aggressive uptrend since mid-April, recently hitting its highest level since March 8.

• The NZD/USD surged to a four-month high near 0.6220 during Wednesday’s NY session, bolstered by a softer-than-expected US CPI data, which has increased Fed's rate-cut bets for September, before giving back some of those gains throughout the June FOMC press conference as Chair Powell confirmed participants had access to the May CPI data before finalising their economic projections that point to just one Fed cut in 2024.
• NZD/USD has opened a touch higher at 0.6187.
• Key levels to watch: Initial resistance 0.6222 (Feb 22 highs), above here 0.6278 (Jan 12 highs). Initial support is now 0.6134 (20-Day EMA) a break here would open a move to 0.6080-90 area (May 23rd lows/ 50, 100, 200-day EMAs).
• The US-NZ 2y swap was down 2.5bps to -28bps.
• NZ is forecasting a 6% increase in primary exports to NZ$58.1 billion for the year ending June 2025, following an estimated 5% decline to NZ$54.6 billion in 2024 the revised 2024 outlook is higher than the previous estimate of NZ$54.3 billion.
• Option expiries: 0.5915 (NZD654m), 0.6170 (NZD340.4m), 0.5950 (NZD305.8m) Upcoming notable strikes: 0.6035 (NZD378.1m June 14)
• Looking ahead: Card Spending Total at 8:45 AEST