- The New Zealand dollar tumbles courtesy of a negative market mood and a bid US dollar.
- US June’s CB Consumer Confidence dipped to a 10-year low on US citizens’ concerns about high inflation and slower growth.
- The US Dollar Index is back above the 104,000 thresholds, courtesy of quarter and month-end flows.
The NZD/USD ticks down and extends its losses to 1% in the week, amidst a negative market sentiment, spurred by a weaker than expected US consumer confidence slid to a decade low, as pessimism grows in North Americans about the US economic outlook. At 0.6242, the NZD/USD is also trading at new two-week lows at the time of writing.
NZD/USD falls due to a negative mood amidst a buoyant US dollar
US equities remained under heavy pressure as the portfolio rebalancing continued. In the FX space, sentiment bolstered the safe-haven peers, in this case, the greenback and the CHF. That said, the NZD/USD proceeded to dive after reaching a daily high in the mid-European session around 0.6313, sliding afterward below the June 27 daily low at 0.6281, followed by a fall to the 0.6240s area.
In the meantime, the US Dollar Index, a measure of the greenback’s value against its peers, edges up 0.54% at 104.504, boosted by quarter and month-end flows. Contrarily, the US 10-year benchmark note rate is at 3.192%, almost flat.
During the North American session, Fed Regional indices were released. The Richmond Fed’s Manufacturing Index dipped below the expectations, contracting from -19.0 vs. -12.0 foreseen, while the Dallas Fed Services Index shrank.
Additionally to that, Fed officials were crossing newswires. Mary Daly, the San Francisco Fed President, said that the Fed could address inflation while adding that, according to her, demand is “half of the cause of inflation” and said that the US would have slower growth.
Before Wall Street opened, the New York Fed President John Williams said that officials would discuss whether to hike 50 or 75 bps the Federal funds rate in the next month on Tuesday. Williams added that policymakers would be data-dependent and do not foresee a recession in his baseline, though he acknowledged that the US economy might slow down.
NZD/USD Key Technical Levels