The New Zealand dollar enjoyed modest gains through trade on Tuesday, edging marginally higher on a sustained appetite for risk and broader USD softness. The New Zealand dollar stopped just short of breaking through 0.69, touching intraday highs at 0.6898 as investors and markets stabilised, consolidating recent moves and electing to maintain ranges.
Having largely shrugged aside RBNZ moves to increase capital bank requirements the NZD has enjoyed a sustained upside as optimism surrounding US-China trade relations bolsters demand for risk, while the Fed affirmed its commitment to patience and data dependency. Commentary from Jerome Powell was peppered with a dovish lilt as the Fed Chair reiterated that inflation pressure was muted and global pressures were showing signs of weighing on US domestic growth. Powell’s Senate address did little to assuage investors’ fears the Fed will remain on hold through 2019 and possibly cut rates in 2020, forcing a downward correction in the USD and supporting the recent NZD upturn.
Resistance remains intact on moves approaching 0.69/0.6920 as attentions turn to Domestic Trade Balance data and a slew of US indicators for direction through Wednesday.