- Deteriorating sentiment, amid mixed signals from the Fed, weakened the New Zealand dollar.
- Inflation expectations in the United States rose, according to Americans.
- The NZD/USD pair is keeping an eye on next week’s New Zealand CPI report.
The pair NZD/USD It broke two straight days of gains and broke above the 200, 50 and 100-day EMAs in a move to risk aversion spurred on by Fed comments and expectations of further tightening. US economic data deteriorated further, but inflation expectations raised the likelihood of another Fed rate hike after the May meeting. At the time of writing, the NZD/USD pair is trading at 0.6207, down 1.38%.
US economy slows as inflation expectations rise
Wall Street will end the last trading day of the week with losses. US data showed that the economy is slowing down, as evidenced by Retail Sales and Industrial Production. March sales fell 1%m/m, below an expected contraction of 0.4%, while y/y came in at 2.9%, down from 5.9% in the previous month. For its part, Industrial Production (IP) fell for the first time in the year and grew 0.4% month-on-month, below the 0.9% in February.
Meanwhile, a survey released by the University of Michigan found that US consumer sentiment for April improved to 63.5 from the previous reading of 62. The same report reported that inflation expectations rose to 4.6% from 3.6% in the previous year. previous report.
These two reasons drove the NZD/USD up. Following the data release, the NZD/USD pair hovered around 0.6260 before slumping towards a daily low of 0.6195.
In addition to the above, Federal Reserve officials continued to cross news wires, though they gave mixed signals. The president of the Atlanta Fed, Raphael Bostic, was in favor of one more increase, to later assess what is needed in monetary policy. By contrast, Fed Governor Christopher Waller said more tightening is needed over a “substantial and longer period of time than markets anticipate.” Chicago President Austan Golsbee said he would focus on tightening credit conditions and loan data when it comes to his decision for the next meeting on May 2-3.
On the New Zealand (NZ) front, the business PMIS stood at 48.1, down from 51.7 the previous month. The data was largely ignored by NZD/USD traders, focusing on the following week’s CPI report, with estimates for 1.8% qoq inflation in the first quarter, while yoy inflation is expected to hold at 7.2. %.
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.
