NZDUSD climbs above the 0.5900 market level as the USD weakens. The NZDUSD pair rose above the 0.5900 market level on Monday. Whereas the US dollar (USD) lost some footing amid lower US Treasury bond yields and a lack of major monetary data from the US.
n
The New Zealand dollar (NZD) found some support from the positive domestic data released last week. This showed an improvement in manufacturing sales, commodity prices, and terms of trade in the second quarter. The NZD is also seen as a proxy for the Chinese economy. It, however, reported better-than-expected inflation figures for August over the weekend.
US Dollar (USD) is Under Pressure
The Chinese Consumer Price Index (CPI) rose 0.10% year-on-year, while the Producer Price Index (PPI) fell 3.00%. They both beat market expectations.
On the other hand, the USD was under pressure as US Treasury bond yields declined. It, however, reduces the appeal of the greenback. The 10-year US Treasury yield was down by 1.50 basis points to 1.36%. The market sentiment was also cautious ahead of key US inflation data due on Wednesday. This could have a significant impact on the Federal Reserve’s (Fed) monetary policy outlook. The Fed has maintained that the current inflation surge is transitory and that it will not rush to taper its asset purchases or raise interest rates.
However, some Fed officials have expressed concerns about the inflation risks and called for earlier tapering.
Apart from the US inflation data, the market will also pay attention to the US retail sales data for August. This will be released on Thursday, as will the Chinese retail sales and industrial production data for August, which will be released on Friday. These data could provide further clues about the economic recovery and demand prospects in both countries.
Note: Forexschoolonline.com is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.
Leave a Reply