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NZD/USD Settles Below 0.6100, Rate Cut Expectations Grow

NZD

The NZD/USD finished the Wednesday trading off down 0.70% at 0.6082 after the RBNZ maintained its benchmark interest rate at 5.5%, signaling a potential shift away from further monetary tightening, further declines in the pair are expected as the market now prices in a 51% chance of a cut in August, up from about 20% prior to the RBNZ meeting.

  • Overnight, Powell gave testimony to the House Financial Services Committee, where he said " The Fed needs more good data on inflation to gain enough confidence to begin cutting interest rates" and " "good ways to go" where referring to the fed's quantitative tightening program, overall he continued to sounds slightly more dovish.
  • The NZD/USD fell to 0.6080 area post the RBNZ meeting, before trading sideways for the remainder of the session. The pair currently trades just below the 200-day EMA which now looks to be acting as resistance, while the 14-day RSI has dropped below 50 to 44.
  • Immediate support is seen at 0.6048 (July 2nd lows) a break would open up a move to 0.6000 area (May 14 low/ Round Number). Initial resistance is at 0.6088 (100-day EMA), while a break back above 0.6110 (20-day EMA), would be needed in order to commence the bullish trend, and a test of 0.6154 (July 8 highs)
  • The NZ-US 2yr swap is 7bps lower at 20.5bps.
  • Expiries: 0.6150 (NZD640.64m) for July 11 NY Cut, upcoming notable strikes: 0.6080 (NZD300m July 12)
  • Today, Food Prices at 08:45 AEST, and 29, 34, 37 Bond Auctions at 12:35 AEST.
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The NZD/USD finished the Wednesday trading off down 0.70% at 0.6082 after the RBNZ maintained its benchmark interest rate at 5.5%, signaling a potential shift away from further monetary tightening, further declines in the pair are expected as the market now prices in a 51% chance of a cut in August, up from about 20% prior to the RBNZ meeting.

  • Overnight, Powell gave testimony to the House Financial Services Committee, where he said " The Fed needs more good data on inflation to gain enough confidence to begin cutting interest rates" and " "good ways to go" where referring to the fed's quantitative tightening program, overall he continued to sounds slightly more dovish.
  • The NZD/USD fell to 0.6080 area post the RBNZ meeting, before trading sideways for the remainder of the session. The pair currently trades just below the 200-day EMA which now looks to be acting as resistance, while the 14-day RSI has dropped below 50 to 44.
  • Immediate support is seen at 0.6048 (July 2nd lows) a break would open up a move to 0.6000 area (May 14 low/ Round Number). Initial resistance is at 0.6088 (100-day EMA), while a break back above 0.6110 (20-day EMA), would be needed in order to commence the bullish trend, and a test of 0.6154 (July 8 highs)
  • The NZ-US 2yr swap is 7bps lower at 20.5bps.
  • Expiries: 0.6150 (NZD640.64m) for July 11 NY Cut, upcoming notable strikes: 0.6080 (NZD300m July 12)
  • Today, Food Prices at 08:45 AEST, and 29, 34, 37 Bond Auctions at 12:35 AEST.