Thepair has witnessed a slight recovery after hitting a low of 0.6320 in the late US session. The asset is recovering after a corrective move from Monday’s high at 0.6365. A sideways move is expected in the Kiwi as investors are on the sidelines ahead of the Federal Reservechair Jerome Powell’s testimony, which is due on Wednesday.
The US dollar index is ranging after a bearish move as traders await Fed Powell’s testimony, which will provide a glance of the likely monetary policy action in July. It is worth noting that the Fed raised its interest rates by 75 basis points last week. Thanks to the running inflation and extremely low Unemployment Rate which has supported the Fed to take the necessary steps required for containing inflation. The Fed is likely to continue the unexpected and announce a consecutive 75 bps rate hike in July to roll back inflation’s near-targeted rate quickly.
Furthermore, a stable monetary policy by the People’s Bank of China has supported the antipodean. New Zealand is a leading exporter to China, therefore a neutral stance on policy rates by the PBOC will keep the kiwi dollar stronger. In the meantime, Consumer Confidence has landed extremely lower. The Westpac Consumer Survey for the second quarter has been recorded at 78.7, much lower than the estimates of 100 and the prior print of 92.1.
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