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NZD/USD rises to 0.6160 as Dollar weakens after stable US PCE inflation report

  • NZD/USD advances strongly to 0.6160 as US Dollar falls following expected growth in US PCE Inflation in April.
  • Persistently high inflation in the US would affect the Fed's rate cut bets for September.
  • Investors shift focus to ISM PMI and US Employment data.

The NZD/USD pair shoots up to 0.6160 in the American session on Friday. NZD/USD is seeing significant buying interest as the US Dollar weakens following the United States (US) Personal Consumption Expenditure (PCE) Price Index report for April, which showed that pressures on Prices grew in line with estimates.

Monthly and annual headline inflation grew as expected by 0.3% and 2.7%, respectively. Core PCE inflation, which is the Federal Reserve's (Fed) preferred inflation gauge as it excludes volatile food and energy prices, rose 0.2%, slower than estimates and the previous release of 0.3% in terms monthly. However, annual core PCE inflation increased as expected by 2.8%.

Persistently high PCE inflation makes it unlikely that the Fed will begin reducing interest rates as early as the September meeting. The scenario is generally favorable for the US Dollar, however, it is weak due to the downward revision of the US first quarter Gross Domestic Product (GDP) data. The revised estimate for the first quarter GDP shows that the economy expanded at a slower pace of 1.3% from the preliminary estimate of 1.6%.

The US Dollar Index (DXY), which tracks the value of the Dollar against six major currencies, is falling more than 0.3% around 104.40.

Next week, investors will focus on the manufacturing and services PMI, which will be released by the Institute for Supply Management (ISM) and Nonfarm Payrolls (NFP) for May.

The New Zealand Dollar is holding firm even though China's National Bureau of Statistics (NBS) reported that May manufacturing and non-manufacturing PMI missed estimates. In this situation, the New Zealand Dollar faces pressure, being a proxy for China's economic prospects.

NZD/USD

Summary
Latest price today 0.6156
Today's daily change 0.0041
Daily change % today 0.67
Today's daily opening 0.6115
Trends
SMA20 Journal 0.6077
SMA50 Daily 0.6008
SMA100 Journal 0.6065
SMA200 Journal 0.6047
Levels
Previous Daily High 0.6132
Previous Daily Low 0.6088
Previous Weekly High 0.6153
Previous Weekly Low 0.6083
Previous Monthly High 0.6079
Previous Monthly Low 0.5851
Daily Fibonacci 38.2% 0.6105
Daily Fibonacci 61.8% 0.6115
Daily Pivot Point S1 0.6091
Daily Pivot Point S2 0.6068
Daily Pivot Point S3 0.6047
Daily Pivot Point R1 0.6135
Daily Pivot Point R2 0.6156
Daily Pivot Point R3 0.6179

Source: Fx Street

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