Should we keep an eye on the downside potential for the NZD/USD pair, which has fallen by about 160 pips?
25.05.2023
- Germany's First-Quarter GDP
- Collins (U.S.): Remarks by the President of the Boston Federal Reserve Bank
In yesterday’s U.S. trading session, the U.S. dollar emerged as the strongest currency and gained ground against the New Zealand dollar, which was the weakest. The NZD/USD pair fell by approximately 160 pips from 0.6255 to 0.6093.The downward trend continued during today’s Asian session, with the pair touching 0.6076—a new low for the year. The New Zealand dollar plummeted following yesterday’s announcement that interest rate hikes would end, but we need to remain vigilant to see if the NZD/USD pair will continue to slide toward the 50% Fibonacci retracement level on the weekly chart, around 0.6036.
European currencies saw the pound rise against the yen after the UK’s April Consumer Price Index (CPI), released yesterday, came in at 8.7%, exceeding market expectations of 8.2%. The GBP/JPY pair rose from 171.893 to 172.789. However, it subsequently traded sideways.During today’s Asian session, the pair is trading around 172.400 with an upward bias, so it will be worth watching whether the pound continues to rise into the European session.
Today’s schedule includes: Germany’s Q1 GDP and GfK Consumer Confidence Index at 3:00 PM; the TCMB policy rate and statement at 8:00 PM; U.S. initial jobless claims, Q1 GDP, and the GDP core deflator at 9:30 PM; and U.S. Federal Reserve Governor Barkin’s remarks at 10:50 PM:Richmond Fed President remarks, at 11:00 PM: U.S. Existing Home Sales, at 11:00 PM: U.S. Weekly Natural Gas Inventories, U.S. Collins: Boston Fed President remarks, at 12:00 AM: U.S. Kansas City Fed Manufacturing Index, and at 2:00 AM: U.S. 7-Year Treasury Auction.We will closely monitor the downside potential for the NZD/USD pair, which has fallen by approximately 160 pips.
Author: Keisuke Sakurai
