NZD/USD

The NZD/USD pair declines to around 0.5710 during the early European trading hours on Wednesday. Hawkish rhetoric from US Federal Reserve (Fed) officials regarding sticky US inflation provides some support to the US Dollar (USD) against the New Zealand Dollar (NZD).

Four weeks of selling have taken NZD/USD from just under 0.6000 to its lowest since early July. On Tuesday the pair dipped under 0.5700, then climbed back into the 0.5700 to 0.5800 range it has traded in since September 16, and it's trading in the lower half of that range.

MUFG's Lee Hardman highlights the New Zealand Dollar (NZD) as the main overnight mover, boosted by hawkish guidance from Reserve Bank of New Zealand (RBNZ) Governor Breman. His comments on higher Oil-driven inflation have reinforced expectations for a third consecutive 25 bps hike next month.

The New Zealand Dollar (NZD) shows a modest recovery against the US Dollar (USD) on Thursday, favoured by somewhat brighter market sentiment as Brent Oil prices remain below the $100 level, which provides some relief to Oil-importing economies like New Zealand’s.

• New Zealand dollar advanced following stronger-than-expected second-quarter economic expansion metrics. • US dollar faced selective profit-taking and consolidation after recent market rallies. • Global risk sentiment improved alongside stable raw material prices and trade discussions.

Reserve Bank of New Zealand (RBNZ) Governor Anna Breman said on Tuesday that if higher oil prices persist, they are expected to result in somewhat higher near-term inflation than assumed in the September statement.