NZD/USD hits over one-month high, around 0.6330 area amid modest USD weakness – by hareshmenghani NZDUSD Fed Bonds RBNZ Currencies
one-month high on Monday. The pair maintains its bid tone through the early European session and is currently placed around the 0.6325-0.6330 region, up over 0.75% for the day.
The US Dollar kicks off the new week on a weaker note and remains well within the striking distance of the monthly low touched last Thursday, which, in turn, is seen acting as a tailwind for the NZD/USD pair. Growing acceptance that the Federal Reserve is approaching the end of its rate-hiking cycles overshadows the better-than-expected release of the US monthly employment details on Friday.
Apart from this, a generally positive tone around the equity markets further undermines the safe-haven buck and benefits the risk-sensitive Kiwi. The New Zealand Dollar draw additional support from the upbeat domestic jobs data released last week, which backs the case for further interest rate hikes by the Reserve Bank of New Zealand .
The ongoing strong move up could also be attributed to some technical buying following last week's sustained breakout through the very important 200-day Simple Moving Average . This, along with the fact that oscillators on the daily chat are still far from being in the overbought zone, supports prospects for a further near-term appreciating move for the NZD/USD pair. In the absence of any relevant market-movingfrom the US, the US bond yields will influence the USD.
The market focus, meanwhile, will remain glued to the release of the latest US consumer inflation figures on Wednesday. Any upside surprise would challenge bets for a rate cut as soon as September and prompt some near-term short-covering around the USD. This, in turn, warrants some caution for aggressive bullish traders and before positioning for any further appreciating move for the NZD/USD pair, at least for the time being.
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