- Fed's Jerome Powell warns of persistent inflation and sends the US dollar higher.
- Fragile market sentiment amid concerns over the Middle East conflict is weighing on the risk-sensitive New Zealand Dollar.
- Investors' attention is now focused on New Zealand CPI data, due to be released on Tuesday.
Risk-off sentiment amid concerns about an escalation of the conflict in the Middle East is weighing on the New Zealand dollar this week. The NZD/USD pair has depreciated around 3.6% in recent sessions and is about to test the 0.5860 support zone.
The US dollar remains firm, boosted by rising US bond yields, with investors reassessing their Fed easing schedule. On Tuesday, Fed Chair Jerome Powell suggested that recent data shows a lack of progress on inflation, supporting the Fed's “higher for longer” outlook.
Early on Tuesday, mixed data from China released on Wednesday failed to provide any significant boost to the New Zealand Dollar. Chinese GDP accelerated to 5.3% annual growth in the first quarter, above expectations for a 5% reading. However, these figures have been offset by the weakness of consumption and industrial production data.
Attention now turns to the New Zealand Consumer Price Index, which will be released on Tuesday. Price pressure is expected to have increased in March, which would provide support for the New Zealand Dollar. A negative surprise could accelerate the pair's downtrend.
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.
