News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Gold
Bullish
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • interested to see the responses here $Gold https://t.co/NBz8Jyy1qu
  • Gold prices hit a fresh seven-month low last week, eventually finding Fibonacci support. But with US rates in focus for the Fed on 3-16 - what will happen first?
  • https://t.co/mviHFA68q9
  • #Bitcoin, #Gold, #Dollar, $EURUSD, $AUDUSD and $USDCAD Technical Levels - (Webinar Archive) - https://t.co/YozHhSFHxc
  • Indices Update: As of 17:00, these are your best and worst performers based on the London trading schedule: US 500: 2.39% Wall Street: 2.18% FTSE 100: 0.23% Germany 30: 0.17% France 40: 0.09% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/O0R5hSwfSN
  • #Gold attempted to rebound from multi-month lows today, climbing as high as $1,760 before hitting resistance and turning back downwards. The precious metal is now trading back around $1,735. $XAU $GLD https://t.co/QgXRBljgWe
  • Equities have managed to start the new month on the front foot as bond yields are taking a breather from their rapid surge over the last few weeks. DAX 30 bulls aim towards the 14,000 mark. Get your #DAX market update from @HathornSabin here:https://t.co/E7CYIM0KQC https://t.co/bnFyQfXLP6
  • ECB President Lagarde: - Pandemic is still heavily weighing on European economies - ECB will do its job to ensure firms and families can access finances needed to weather the storm - They can do so with confidence that financing conditions will not tighten prematurely #ECB $EUR
  • Heads Up:💶 ECB President Lagarde Speech due at 16:10 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-03-01
  • Forex Update: As of 15:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.92% 🇨🇦CAD: 0.66% 🇳🇿NZD: 0.62% 🇯🇵JPY: -0.04% 🇪🇺EUR: -0.25% 🇨🇭CHF: -0.65% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/hg9Ce9xspE
New Zealand Dollar to Fall if Fed Rate Hike Fears Fuel Risk Aversion

New Zealand Dollar to Fall if Fed Rate Hike Fears Fuel Risk Aversion

Ilya Spivak, Head Strategist, APAC
New Zealand Dollar to Fall if Fed Rate Hike Fears Fuel Risk Aversion

Fundamental Forecast for New Zealand Dollar: Bearish

  • Soft Second-Quarter PPI Data May Undermine RBNZ Rate Hike Bets
  • NZ Dollar to Decline if US CPI, FOMC Minutes Trigger Risk Aversion
  • Help Identify Critical Turning Points for NZD/USD with DailyFX SSI

A relatively timid domestic calendar is led by second-quarter PPI figures. New Zealand price-growth data has increasingly underperformed relative to consensus forecasts since February, suggesting economists have tended to overestimate inflation and opening the door for a soft print. Such an outcome would suggest the RBNZ may be relatively slow to resume raising interest rates after signaling a pause, weighing on the exchange rate.

External factors may prove to be a more robust catalyst as hefty event risk emerges from the US by way of July’s CPI figures as well as the release of minutes from last month’s FOMC policy meeting. The headline year-on-year inflation rate is expected to tick slightly lower to 2.0 percent, down from 2.1 percent in the prior month. A steady stream of above-consensus readings since the beginning of the year seems to put surprise risk on the upside.

As for the Fed, it notably upgraded its language on price growth in July’s FOMC statement, saying the “likelihood of inflation running persistently below 2 percent has diminished. Indeed, it will be the reasoning behind this seemingly subtle but nonetheless significant change in verbiage that investors will be most concerned with as they comb through the Minutes document. If policymakers are turning more sanguine about inflation, that means the time gap between the end of QE3 – expected in October – and the first subsequent interest rate hike may prove relatively short. An upbeat CPI print would only reinforce such thinking.

On balance, such a scenario bodes ill for the New Zealand Dollar. As the highest-yielding currency in the G10 FX space, the Kiwi stands out as particularly vulnerable if risk appetite unravels and capital flees return-oriented assets for safer shores. The prospect of a sooner-than-expected start to Fed tightening may trigger just such a dynamic. The formative role of US monetary policy in supporting risk sentiment is hardly controversial at this point; one need only compare the five-year trajectory of the S&P 500 and the US central bank’s balance sheet to see it. As stimulus helped build out the risk-on rally since the end of the 2008-09 crisis, so too a shift toward a more hawkish posture may undermine it, and in so doing sink the New Zealand Dollar.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES