NZD/USD returns to the 0.5640 area, pares Friday’s losses
17.10.2022, 17:02

NZD/USD returns to the 0.5640 area, pares Friday’s losses

 

  • The NZD appreciates to 0.5650 after bouncing up from two-year lows at 0.5550.
  • The kiwi pares previous losses buoyed by brighter market sentiment.
  • The focus is now on the release of New Zealand's CPI data, due later today.

The New Zealand dollar has opened the week on a firm footing to reach levels right below 0.5650 on Monday, after bouncing up from two-year lows of 0.5550.

Risk appetite buoys the kiwi

The kiwi has been favoured by the brighter market sentiment on Monday, as the investors welcomed the comments of the new UK Finance Minister, confirming the U-turn on most of the aspects of the mini-Budget plan that roiled financial markets.

Investors' optimism has been reflected in the positive stock markets on Monday. The US Dow Jones Index advances 1.76%, while the S&P trades 2.5% up and the Nasdaq. Technological Index rallies 3,2% at the time of writing.

The improved sentiment has weighed on US Treasury yields, sending the US dollar lower across the board. The US Dollar Index, which measures the value of the greenback against a basket of the most traded currencies is showing a 1.1% pullback, which erases the previous two weeks' gains.

In New Zealand, the focus today will be on the release of the Q3 Consumer Prices Index figures. Inflation pressures are expected to have eased somewhat. This should not have a relevant impact on the pair, unless the final reading suggests a diversion in monetary policy expectations.

Technical levels to watch

 

 

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