NZD/USD bounces from day’s low to near 0.6820 as DXY struggles around 100.00
11.04.2022, 05:00

NZD/USD bounces from day’s low to near 0.6820 as DXY struggles around 100.00

  • NZD/USD bounces from 0.6820 as the DXY loses momentum.
  • The RBNZ is likely to announce a hike in its OCR rate by 25 basis points.
  • Higher US CPI print may underpin a 50 bps interest rate hike by the Fed.

The NZD/USD pair is defending the early Asian session low around 0.6820 as the US dollar index (DXY) is struggling to overstep the critical figure of 100.00. The DXY is displaying a broader strength amid rising bets over a healthy stretch in the US Consumer Price Index (CPI), which will release on Tuesday.

The street is expecting that the yearly US inflation will land at 8.3% against the previous print of 7.9%. This is going to underpin the greenback against the kiwi dollar further as an elevated print of the US CPI may support a 50 basis point (bps) interest rate hike by the Federal Reserve (Fed)’s in monetary policy to be announced in May. Fed policymakers are also advocating an aggressive hawkish stance to contain the inflation mess.

Meanwhile, China’s National Bureau of Statistics has printed the yearly Consumer Price Index (CPI) at 1.5%. The yearly CPI has landed higher than the street expectation and prior figure of 1.2% and 0.9% respectively. This has trimmed the expectation of a dovish stance from the People’s Bank of China.

Going forward, the official cash rate (OCR) decision from the Reserve Bank of New Zealand (RBNZ) will be the major event, which is due on Wednesday. It is worth noting that the RBNZ has elevated its OCR rate by 25 bps each in its last two monetary policies and is expected to hike further by 25 bps to tackle the soaring inflation.

 

 

 

 

 

 

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