- NZD/USD recovers to 0.6200 after Monday’s US banking crisis dampened sentiment.
- US CPI figures were in line with estimates, although inflation remains high.
- Traders are keeping an eye on US Retail Sales, PPI and New Zealand GDP for Q4 2022.
NZD/USD rebounds from weekly lows of 0.6084 and rises despite US inflation report justifying further tightening by US Federal Reserve ). The NZD/USD pair is holding firm around 0.6221 after breaking above the 20-day EMA.
US CPI for February in line with estimates
Stocks rose again as concerns about the failure of three US banks eased. The US Department of Labor reported that annual inflation for February was in line with forecasts. Headline inflation, the Consumer Price Index (CPI), increased by 6%. Excluding food and energy, the core CPI rose 5.5%. Monthly readings put the CPI at 0.4%, as expected, while the measure excluding food and energy was 0.5%, higher than expected.
The head of the US central bank, Jerome Powell, declared last week that the main interest rate would rise more than expected. He also pointed out that strong economic data would cause interest rates to rise faster. But recent troubles in the US banking system have traders hoping for a less aggressive central bank as they worry more banks could fail.
US Treasury yields rise after knee-jerk reaction on Monday sent them tumbling. Yields on 2- and 10-year US Treasuries are back to familiar levels, with 2-years at 4,389%, up 40 basis points, and 10-years at 3,659%. Against this background, the dollar’s decline stopped, as the Dollar Index (DXY) shows. The DXY gains 0.17% to 103,801.
What is there to watch out for?
In New Zealand (NZ), the absence of economic data on the calendar left traders adrift on market sentiment and the dynamics of the US dollar (USD). However, on Wednesday the Gross Domestic Product (GDP) for the fourth quarter will be published, estimated at 3.3% year-on-year and -0.2% quarter-on-quarter. On the US side, the calendar will include Retail Sales and the Producer Price Index (PPI).
NZD/USD Technical Levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
