The NZD/USD pair is gathering strength for extending its recovery above 0.6186 in the Asian session. The Kiwi asset recovered firmly after dropping to near 0.6160 as the US Dollar Index (DXY) went through a gradual correction. The New Zealand Dollar is expected to remain on the tenterhooks as investors are awaiting the release of China’s Gross Domestic Product (GDP) (Q1) data.
S&P500 futures are showing a subdued performance in the Tokyo session as investors are worried about corporate profits to be reported ahead. Tech-giant Google was dumped by investors amid reports that South Korea's Samsung Electronics was considering replacing Google with Microsoft-owned Bing as the default search engine on its devices.
The US Dollar Index (DXY) is displaying a rangebound performance around 102.10 after a nominal correction. The USD Index is expected to resume its upside journey as investors are anticipating a continuation of the policy-tightening spell by the Federal Reserve (Fed).
As per the consensus, the Chinese economy has expanded by 2.2% vs. a stagnant performance. On an annual basis, the economy is expanded by 4.0% against the 2.9% growth rate recorded earlier. It is worth noting that New Zealand is one of the leading trading partners of China and higher Chinese GDP data would support the New Zealand Dollar.
Later this week, New Zealand’s quarterly inflation data will be keenly watched. According to the consensus, NZ inflationary pressures have accelerated by 2.0% in the quarter, higher than the former pace of 1.4%. Annual NZ inflation data has scaled to 7.5% from the former release of 7.2%. Households in the NZ economy are expected to go through a lot of pain as NZ inflation is becoming stubborn further despite higher rates by the Reserve Bank of New Zealand (RBNZ).
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