New Zealand Dollar recovers from two-week low as fading Fed hike bets undermine USD
The NZD/USD pair is seen building on the previous day's bounce from the 0.5820 region, or a two-week low, and gaining some positive traction during the Asian session on Friday. Spot prices climbed back above 0.5850 in the last hour and, for now, seem to have snapped a four-day losing streak.
The New Zealand Dollar (NZD) experienced a recovery from a two-week low, rebounding above its key support level of 0.5820 in the Asian session on Friday. This bounce was driven by cooling inflation signs, as highlighted by the US Consumer Price Index (CPI) and Producer Price Index (PPI), which forced traders to reduce expectations of an immediate rate hike by the US Federal Reserve (Fed).
The weakening of the US Dollar (USD) played a crucial role in supporting the NZD/USD pair. However, political tensions between the US and Iran, as well as the ongoing Strait of Hormuz conflict, provided a boost to the safe-haven US Dollar, making it challenging for traders to place aggressive directional bets. The Reserve Bank of New Zealand (RBNZ) reported that inflation expectations eased in the third quarter, settling at 2.34% from 2.53% previously, which reduced the pressure for further interest rate hikes and helped keep the Kiwi relatively stable.
Traders are advised to wait for strong follow-through buying before taking positions for further appreciation of the NZD/USD pair.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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