New Zealand Dollar, NZD/USD, Wall Street, Crude Oil, NZD Credit Card Spending – Talking Points
Thursday’s Asia-Pacific Forecast
The New Zealand Dollar rose overnight versus the US Dollar, the currency pair’s sixth consecutive daily gain. A moderate risk-taking mood is helping the Kiwi Dollar, along with other risk-sensitive currencies. Wall Street traders remained bullish on equities in Wednesday’s New York session. The safe-haven dollar fell, with the USD DXY index dropping nearly 0.20% going into APAC trading.
A pullback in short-dated Treasury yields is helping to drag the US Dollar lower despite Federal Reserve rate hike bets, which continue to increase as traders price in stickier inflation alongside economic growth as Covid restrictions come off across the world. The 2-year note’s yield fell for a second day, moving off its highest level since March 2020.
Crude oil prices are on the move higher after the Energy Information Administration (EIA) reported a surprise draw of 431k barrels in crude oil inventories overnight. Analysts were expecting a build of nearly 2 million barrels for the week ending October 15. Stocks at Cushing, Oklahoma – the US delivery point for oil – fell over 2 million barrels in one of the largest draws of the year.
Today will see Japanese foreign bond investment data for the week ending October 16 cross the wires. New Zealand credit card spending (September) will drop at 02:00 GMT. That print will offer insights into spending habits for the Kiwi economy after lockdowns across Auckland eased. RBNZ bets have risen sharply recently, dragging the Kiwi Dollar higher. The RBNZ is expected to initiate a second rate hike next month at the pace of 25 basis points.
NZD/USD Technical Forecast
NZD/USD is pushing into the highest levels traded since early June. However, prices may have run too far too fast, with the Relative Strength Index (RSI) flashing an overbought signal above the 70 level. The psychologically imposing 0.7200 level also appears to be offering a degree of resistance.
A pullback may be on the cards, perhaps to the 9-day Exponential Moving Average (EMA). Otherwise, bulls may continue driving prices higher, with a goal of firming up prices above the aforementioned 0.72 handle.
NZD/USD Daily Chart
Chart created with TradingView
— Written by Thomas Westwater, Analyst for DailyFX.com
To contact Thomas, use the comments section below or @FxWestwateron Twitter
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