NZD:USD.png

NZD/USD accepts bids to re-establish the intraday low near 0.6290, thereby re-testing the weekly trough established on Thursday. In doing so, the Kiwi pair justifies the recently published pessimistic data from New Zealand (NZ), as well as the pessimistic sentiment. It is important to note that the commodity-linked pair declined the most in a month the day before due to broad US Dollar strength.

In spite of this, the Business NZ PMI for April fell to 49.1 compared to 50.7 anticipated and 48.1 previously, while Visitor Arrivals slowed to 805% in March compared to the prior growth of 4,998%.

In April, however, the US Producer Price Index (PPI) improved to 0.2% MoM from 0.3% expected and -0.4% previously. Importantly, the PPI excluding food and energy, also known as the Core PPI, increased on a month-to-month basis but decreased on a yearly basis. In addition, Initial Jobless Claims in the United States increased by 264,000 to reach their highest level since October 2021, which exacerbated the risk-averse sentiment and favored the US Dollar.

Additionally weighing on the NZD/USD are the remarks of Minneapolis Fed President Neel Kashkari, who warned Thursday that inflation is above the Fed's 2% objective while speaking at the Marquette CEO Town Hall in Michigan.

It should be noted that the escalating market concerns surrounding the US debt ceiling expiration and banking fallouts appear to be preparing the US Dollar for its first weekly gain in three weeks.

However, the postponement of the debt ceiling discussions between US President Joe Biden and House Speaker McCarthy and the decline in the stock price of PacWest Bancorp appear to be the most significant negative developments in these matters. In addition, warnings from US Treasury Secretary Janet Yellen and Beth Hammack, Chair of the Treasury Borrowing Advisory Committee and Co-Head of Goldman Sachs' Global Financing Group, about a potential US default threaten market sentiment and impact on the NZD/USD exchange rate.

It's worth noting, however, that the recent inactivity of the S&P500 Futures and yields, following the disappointing Wall Street performance and two-day decline in the leading US Treasury bond yields, has prompted Kiwi pair sellers ahead of additional information about US inflation.

Consequently, preliminary readings of the University of Michigan's (UoM) Consumer Sentiment Index (CSI) for May, as well as the UoM 5-year Consumer Inflation Expectations for the same month, adorn Friday's economic calendar and should be closely monitored for distinct indications. The latest developments on the US debt ceiling and banking sectors are also essential.

Trade

Market

Market Analysis

Trading Tutorial

Bonus rebate to help investors grow in the trading world!