NZD/USD aims to recapture 0.6200 as investors assess US economic and monetary outlook
- NZD/USD is looking to recapture 0.6200 amid a recovery in the risk-on mood.
- The USD Index had come under pressure as investors are making assessments of economic outlook of the US and monetary outlook by the Fed.
- Fed Powell conveyed that the central bank will continue tightening rates at a ‘careful pace’.
The NZD/USD pair has jumped to near its crucial resistance of 0.6190 in the Asian session. The Kiwi asset is expected to recapture the round-level resistance of 0.6200 as the US Dollar Index (DXY) has continued its correction for the second trading session.
S&P500 futures have added significant gains in Asia, portraying a recovery in the risk appetite of the market participants. US equities witnessed a steep fall on Tuesday as investors were cautious ahead of the quarterly result season which will start sooner. A sell-off in US equities was propelled by weakness in technology stocks as investors are anticipating poor guidance from them.
The US Dollar Index is making efforts for keeping its auction stable above 102.60. The USD Index is going through a rough phase as investors are making an assessment of the economic outlook of the United States and the monetary outlook by the Federal Reserve (Fed).
Where Atlanta Fed Bank President Raphael Bostic favored a continuation of a steady policy as further restriction could damage the strength of the economy, San Francisco Fed Bank President Mary Daly suggested that two more rate hikes this year are a “very reasonable” projection.
While Fed chair Jerome Powell conveyed that the central bank will continue tightening rates at a ‘careful pace’. US manufacturing activities are consistently contracting for the past seven months and no recovery is expected yet.
On the New Zealand Dollar front, New Zealand Minister of Finance (FinMin) Grant Robertson announced a renewal of the Reserve Bank of New Zealand’s (RBNZ) remit and charter on Tuesday. He further added, “MPC now required to achieve and maintain inflation between 1% and 3% rather than keep.”