NZD/USD remains under pressure above the 0.5900 mark, all eyes are on Fed Powell’s speech

• NZD/USD loses traction near 0.5925 amid the USD demand.
• US Durable Goods Orders for July came in below expectation, while unemployment claims below estimates.
• All eyes are on Fed Chairman Powell’s speech on Friday.

The NZD/USD pair faces some follow-through selling and drops to 0.5925 during the early Asian session on Friday. The US Dollar Index (DXY) falls to its lowest level since early June and rebounds to the 104.00 area, supported by risk aversion and higher US Treasury yields.

At the Jackson Hole Symposium, Federal Reserve Bank of Philadelphia President Patrick Harker stated that the central bank has probably done enough with restrictive monetary policy. He also said that he believes the Fed will remain interest rate stable this year, but that next year would depend on the data. While, Boston Federal Reserve President Susan Collins said further rate rises are possible and that sending a strong signal regarding the timing of rate cuts is premature.

About the data, US Durable Goods Orders MoM for July fell -5.2%, above estimations of -4% and below the 4.4% gain in the previous month. This is the biggest decline since April 2020. Furthermore, the Chicago Fed National Activity Index for July increased to 0.12 from -0.33 prior, while the Kansas Fed Manufacturing Activity Index for August rose to 12.0 from -20.0 previously.

Lastly, the weekly figures provided by the US Department of Labour (DOL) on Thursday indicated that Initial Jobless Claims reached 230K in the week ending August 19. The figure came in below 240k expected and prior. The reading is the lowest in three weeks.

New Zealand’s economic calendar remains empty. Earlier this week, Statistics New Zealand released second-quarter Retail Sales QoQ figures, showing an increase to -1.0 from -1.6% prior and better than expected of -2.6%. The chief economist of the Reserve Bank of New Zealand (RBNZ) said that policymakers would lower the OCR sooner than we have signaled if China experienced a more significant deceleration than the RBNZ anticipates.

Looking ahead, investors will closely watch Friday’s speech from Jerome Powell. The speech could provide insights into economic conditions and hints as to whether inflation is under control or whether additional interest rate hikes are required to combat inflation. The events will be critical for determining a clear movement for the NZD/USD pair.