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NZD/USD Reverses Course, As Powell Drives USD Rebound

NZD

NZD/USD is net lower over the past trading day, down -0.35%. We got as high as 0.5942 overnight, but now sit back at 0.5825. The 20-day EMA sits on the downside at 0.5761. On a relative basis NZD was still the second best performer in G10 space, second only to JPY. The only data out today is the ANZ commodity price series, with last month coming in at -0.5%.

  • NZD/USD followed broader USD gyrations overnight, albeit outperforming other crosses for the most part.
  • The US 2yr yield got to sub 4.45% after the FOMC statement, but recovered into the close near 4.62% as Powell stated it was premature to talk of a pause in the rate hiking cycle and that the peak in rates will be higher than previously envisaged (among other hawkish rhetoric). This is likely to keep yield differentials still skewed in USD's favor.
  • US equities sank as the Fed Chair spoke, the S&P500 down 2.5%, although the VIX ended basically unchanged. NZD/JPY couldn't hold gains above 86.50, and we last at 86.05/10.
  • AUD/NZD continues to trend lower though. The pair is back close to 1.0900, fresh lows from late April of this year.
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