- NZD/USD advanced for the second day in a row, rising 3.03% on the week.
- The US PPI for July rose 9.8% annually, lower than estimates and last month’s reading.
- Initial claims for jobless benefits in the US increased for two consecutive weeks, indicating that the labor market is moderating.
The NZD/USD rises above the 100 day EMA around 0.6439 courtesy of positive investor sentiment as reports out of the US show prices could be topping. However, while Fed spokespeople were pleased and welcomed the information, they maintained their aggressive stance. Against this background, the USD remained weak during the day.
At time of writing, NZD/USD is trading at 0.6444, after hitting a daily low below 0.6400, gaining 0.68%.
Sentiment remains positive, with US stocks posting gains of between 0.14% and almost 1%. The US Producer Price Index for July slowed its pace to 9.8% yoy, versus estimates of 10.4%. Also, the so-called core PPI, which excludes food and energy, rose 7.6% year-on-year, in line with the measures.
For its part, initial applications for unemployment benefits in the US for the last week, which ended on August 6, increased by 262,000, less than estimates, but began to show signs of moderation. Notably, applications increased for the second week in a row, further confirming the latter.
The US Dollar Index, a gauge of the dollar’s value against a basket of six rivals, fell 0.12% to 105.055, a tailwind for NZD/USD.
Looking at the data, the New Zealand Calendar reported that visitor arrivals increased by 83.5%, beating expectations of 15%.
What must be considered
New Zealand’s economic docket will include July business PMI, estimated at 49.2, along with food inflation, estimated at 6.5%. In the United States, the Consumer Sentiment of the University of Michigan will be published, estimated at 52.5, and the Consumer Inflation expectations for a horizon of 5 years, forecast at 2.8%.
Key technical levels
Source: Fx Street
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