NZ Dollar Rises As Traders Focus On Fed Rate Outlook

RTT Staff Writer•Tuesday, August 20, 2024•1 min read

The New Zealand dollar strengthened against other major currencies in the Asian session on Tuesday, as traders looked ahead to the release of July FOMC minutes and Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium for clues on the outlook for interest rates.

The People’s Bank of China kept its benchmark loan prime rate unchanged following a surprise cut in July. The PBOC kept its one-year loan prime rate unchanged at 3.35 percent. Similarly, the five-year LPR, the benchmark for mortgage rates, was retained at 3.85 percent.

Investors also analyzed minutes of the Reserve Bank of Australia’s August meeting.

Markets expect that the Federal Reserve will soon signal that it is willing to start cutting interest rates.

In the Asian trading today, the NZ dollar rose to more than a 1-month high of 0.6126 against the U.S. dollar and nearly a 3-week high of 90.18 against the yen, from yesterday’s closing quotes of 0.6113 and 89.60, respectively. The NZD/USD and NZD/JPY pairs may test resistance around 0.62 against the greenback, 94.00 against the yen, respectively.

Against the euro and the Australian dollar, the kiwi advanced to a 6-day high of 1.8091 and a 5-day high of 1.0974 from yesterday’s closing quotes of 1.8131 and 1.1011, respectively.

If the kiwi extends its uptrend, it is likely to find resistance around 1.79 against the euro and 1.08 against the aussie.

Looking ahead, Eurozone CPI data for July and current account figures for June are due to be released in the European session.

In the New York session, Canada CPI data for July and U.S. Redbook report are slated for release.

Check out our free forex signals

Follow the top economic events on FX Leaders economic calendar

Trade better, discover more Forex Trading Strategies