The New Zealand dollar has posted small gains Thursday, as NZD/USD has pushed above the 0.68 line in the North American session.
New Zealand is hugely dependent on its export industry, and the COVID pandemic has taken its toll on exports, as global demand has fallen. However, with the worst of COVID hopefully behind us, global demand has picked up, which bodes well for New Zealand’s economy. The ANZ Commodity Price Index climbed 3.9% in February, its strongest gain since March 2021.
The war in Ukraine has intensified, with fierce fighting reported near Ukraine’s major cities as the number of refugees fleeing from Ukraine has hit one million. Western countries has imposed severe sanctions on Moscow as relations between East and West have plummeted. Russian and Ukrainian officials will hold talks later today, which has raised risk sentiment and kept the New Zealand dollar in positive territory. NZD/USD has been on an impressive roll, posting four straight winning weeks and has gained close to 1 per cent this week. So far at least, the panic in the financial markets has not weighed on the New Zealand dollar, which is sensitive to risk.
Powell Commits To Rate Hike In March
The Fed is again on center stage, as Chair Jerome Powell testified on the Hill on Wednesday and will appear before law-makers today as well. There had been some speculation that the war in Ukraine might force the Fed to delay a rate hike, but Powell removed any such doubts in his testimony, stating that the hike would go ahead as planned. Powell’s comments suggested that the Fed will stick with the traditional 25-bps move rather than a massive half-point hike. The confirmation of a rate hike by Powell boosted U.S. Treasury yields, and currently the 10-year yield is at 1.85%.
NZD/USD Technical
- There is resistance at 0.6826 and 0.6908
- AUD/USD has support at 0.6647 and 0.6550
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.