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.
- There is resistance at 0.7244, followed by resistance at 0.7311
- The first level of support is 0.7106 protecting the round number of 0.7100. Below, we have support at 0.7035
Content 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 Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at email@example.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.