NZD/USD: US dollar unlikely to soften amid hawkish Fed tone – ANZ
The kiwi recovered on Monday as the USD pulled back and equities rebounded. Nonetheless, it is difficult to see the USD softening much amid hawkish Fed rhetoric, in the opinion of economists at ANZ Bank.
NZD/USD at crossroad short-term
“The kiwi strengthened as risk appetite improved, equities rebound and bond yields rise. While the move was mostly USD-driven and it’s too soon to say whether it’s just a pull-back off highs (for the USD), NZD price action nonetheless looks a little more encouraging.”
“Fedspeak overnight (Bullard) discussed the possibility of the Fed hiking before tapering was complete; while technical, it was more hawkish and if that’s the tone we get for the remainder of the week, it’s hard to see the USD softening too much or US inflation expectations coming back a long way.”
“At a crossroad short-term, but longer term we still expect it to strengthen, fuelled by decent growth and commodity gains.”
“Support 0.6703/0.6800/0.6900 Resistance 0.7100/0.7230”