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NZ dollar steady ahead of Consumer Sentiment

The New Zealand dollar is in positive territory in the Monday session. Currently, NZD/USD is trading at 0.7186, up 0.17% on the day.

NZD looked strong throughout last week, but surrendered most of these gains on Friday, as the pair slid 0.74 per cent. It was a combination of economic data and US Treasury yields that sent the pair sharply lower to end the week. The BusinessNZ Manufacturing Index slowed to 53.4 in February, down from 57.5 beforehand. This points to weaker growth in the manufacturing sector. In the US, UoM Consumer Sentiment jumped to 83.0 in February, up from 76.2 a month earlier. The reading was much stronger than the estimate of 78.5 and was its highest level in 12 months. According to Surveys of Consumers chief economist Richard Curtin, the strong reading was a result of the increasing number of vaccinated Americans, as well as anticipation over the Biden stimulus package. Meanwhile, US 10-year yields rose higher on Friday, boosting the US dollar.

Investors eye Federal Reserve, New Zealand GDP 

The New Zealand dollar has started the week quietly, but traders can expect some volatility on Wednesday. New Zealand releases GDP for Q4, one of the last countries to release this indicator. After sharp swings in GDP due to Covid-19 in the previous two quarters, the upcoming release is projected at 0.2%, which would indicate almost no economic growth in the fourth quarter. Despite this, it’s hard to argue with the fact that New Zealand has done an enviable job managing the Covid pandemic. Analysts expect growth to be muted in 2021, but the economy should pick up in 2022.

The Federal Reserve holds its policy meeting on Wednesday, and the message to the market is expected to be dovish, given that the Fed has said it does not anticipate raising rates before 2023. Investors will be particularly interested in the Fed’s dot-plot, which is a signal of the Fed’s expectations of future interest rate changes.

NZD/USD Technical

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This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher [5]

Market Analyst at OANDA [6]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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