NZD/USD finds some composure in mid-0.6700s, eyes Powell speech/NZ CPI later this week

• NZD/USD is attempting to snap a four-day losing streak on Tuesday, having found some composure in the mid-0.6700s.
• The pair has performed poorly recently amid the buoyant buck/weak equities.
• Traders are eyeing an upcoming speech from Fed Chair Powell, as well as NZ CPI this week.

NZD/USD is attempting to snap a four-day losing streak on Tuesday, having found some composure in the mid-0.6700s, though failing to hold above the 0.6750 mark. The pair fell to fresh more than one-month lows on Monday, extending on what has so far been a very poor April, with the pair currently trading nearly 3.0% lower versus the end of last month.

Upside the US dollar/US yields as traders price in a more aggressive Fed tightening cycle in wake of recent hawkish rhetoric from the bank’s policymakers and downside in global equity markets, which remain nervous about central bank tightening, inflation, geopolitics and supply chain disruption amid lockdowns in China have been the main factor weighing on the pair so far this month.

And analysts are flagging a risk that the trends of a stronger buck/higher US yields may yet have further room to run, with Fed Chair Jerome Powell expected to solidify expectations that the Fed will hike interest rates by 50 bps at upcoming meetings. This could well tip NZD/USD below 0.6700.

But kiwi traders should also be aware of the release of key Q1 2022 Consumer Price Inflation figures on Thursday. The YoY rate of inflation is seen jumping to 7.1% and the QoQ rate of price gain is seen hitting 2.0%. After the RBNZ lifted interest rates by 50 bps to 1.50% last week, a few more 50 bps rate hikes might well be in store, maintaining NZD’s rate advantage over the US dollar. This could act to cushion further losses.