NZD/USD bounces off its lowest level since March amid notable USD supply – by hareshmenghani NZDUSD Bonds Fed RiskAppetite Currencies
ssion. The pair, meanwhile, react little to the upbeat US macro data and bounces to the 0.6135-0.6140 region in the last hour amid the emergence of fresh US Dollar selling.
In fact, the USD Index, which tracks the Greenback against a basket of currencies, erases a major part of the overnight gains and turns out to be a key factor lending some support to the NZD/USD pair. A slight improvement in the global risk sentiment - as depicted by a goodish recovery in the US equity markets - is seen as a key factor weighing on the safe-haven buck.
fresh concerns about the regional banking sector crisis in the US, along with the possibility of an imminent recession and worries about the US debt ceiling, have been fueling speculations that the Federal Reserve will cut interestlater this year. The Fed, however, is still expected to hike interest rates by 25 bps in May, which, along with fears about economic headwinds stemming from rising borrowing costs could help limit the downside for the USD.
Bearish traders, meanwhile, might wait for a sustained break through the 0.6100 mark and some follow-through selling below the YTD low, around the 0.6085 region touched in March before placing fresh bets. The focus now shifts to the release of the US Q1 GDP report on Thursday and the US Core PCE
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