- NZD/USD hits a fresh three-week high amid a weak US Dollar and uncertainty ahead of RBNZ policy.
- US Dollar Falls on Moderating US Labor Market Conditions
- Investors expect the RBNZ to maintain its OCR at 5.5%.
The NZD/USD pair hit a fresh three-week high near 0.6150 in the Asian session on Monday. The New Zealand pair extended its winning streak for the fifth consecutive session as the debate over the Federal Reserve (Fed) starting to cut interest rates from the September meeting has intensified after the United States (US) June Non-Farm Payrolls (NFP) report pointed to a normalization of labor market strength.
According to the CME FedWatch tool, 30-day federal funds futures price data show the probability of rate cuts in September has improved to 75.8% from 64% a week ago. The data also show the Fed will make subsequent rate cuts at either the November or December meeting.
The NFP report data showed the unemployment rate unexpectedly rose to 4.1% from estimates and the previous release of 4.0%. Average hourly earnings, a measure of wage growth momentum, slowed as expected on both a monthly and annual basis. New hires were higher at 206,000 from estimates of 190,000, but lower than May’s reading of 218,000.
Mounting speculation about Fed rate cuts has weighed heavily on the US Dollar. The Dollar Index (DXY), which tracks the value of the Greenback against six major currencies, is trading near a three-week low around 104.85. US 10-year Treasury yields are up in trading hours on Monday but are near the weekly low around 4.29%.
This week, the New Zealand Dollar (NZD) will be in the spotlight due to the Reserve Bank of New Zealand (RBNZ) monetary policy meeting on Wednesday. It is widely anticipated that the RBNZ will leave its Official Cash Rate (OCR) unchanged at 5.5%. Therefore, investors will pay close attention to comments on the interest rate outlook. Market participants see the RBNZ keeping its key rates stable throughout the year.
Economic indicator
Interest rate decision
RBNZ Interest Rate Decision is announced by the Reserve Bank of New Zealand.This rate affects a range of interest rates set by commercial banks, building societies and other institutions towards their own savers and borrowers. It also tends to affect the price of financial assets such as bonds, shares and exchange rates, which affect consumer and business demand in a variety of ways.
Next post:
Wed Jul 10, 2024 02:00
Frequency:
Irregular
Dear:
5.5%
Previous:
5.5%
Fountain:
Reserve Bank of New Zealand
The Reserve Bank of New Zealand (RBNZ) holds monetary policy meetings seven times a year, announcing its interest rate decision and the economic assessments that influenced its decision. The central bank provides clues about the economic outlook and future policy path, which are of great relevance to the valuation of the NZD. Positive economic developments and optimistic outlooks could lead the RBNZ to tighten policy by raising interest rates, which tend to be bullish on the NZD. Policy announcements are usually followed by Governor Adrian Orr’s press conference.
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.
