VOT Research Desk
The NZDUSD pair is still under some selling pressure on Thursday for the second consecutive day, and it is falling away from the peak it reached earlier this week that was the highest since September 19.
Through the first part of the European session, the pair continues to fall, and in the last hour, it hits a new daily low below the mid-0.5800s.
The US Dollar continues to gather momentum after making a significant recovery from a multi-week low the day before, which is considered as a major driver pushing the NZDUSD pair down.
A repositioning trade in expectation of higher US consumer inflation numbers may be the cause of the stronger USD movement up. However, a slight decrease in US Treasury bond rates might prevent any additional increases. In addition, a generally upbeat atmosphere in the global markets may work against the safe-haven dollar and benefit the risk-averse Kiwi.
Ahead of the significant US CPI report, traders could also hesitate from making risky bets and instead choose to sit on the sidelines.
The data will have an impact on the Fed’s rate-hiking cycle, which will in turn fuel USD demand and give the NZDUSD pair new life. From the figure of 8.2% last month, the headline US CPI is predicted to slow to 8% YoY in October.
A positive surprise will increase expectations for quicker interest rate increases by the Fed and strengthen the US dollar, which will pave the way for another short-term decline in the value of the dollar.
|
Daily SMA20 |
0.5769 |
|
Daily SMA50 |
0.5819 |
|
Daily SMA100 |
0.6028 |
|
Daily SMA200 |
0.6331 |
