NZD/USD flirts with six-week high of 0.6810 on mixed feelings over Ukraine-Russia talks, Fed
- NZD/USD grinds higher at multi-day top, sidelined of late.
- NZ FinMin Robertson envisages inflation returning to RBNZ’s 1-3% zone.
- Russia-Ukraine talks unveiled safe-corridor for civilian evacuation but geopolitical fears stay on the table, equities, yield remain pressured.
- Hawkish Fed chatters will get additional support on today’s strong US NFP.
NZD/USD seesaws around 0.6800 during early Friday morning in Asia, after refreshing the 1.5-month high the previous day.
The kiwi pair’s previous run-up could be linked to the market’s upbeat mood and the US dollar pullback before the sentiment soured during the mid-Thursday and put the buck back on the driver’s seat. It’s worth noting that the quote fails to pay a little heed to comments from New Zealand (NZ) Finance Minister (FinMin) Grant Robertson.
The policymaker initially said, “The omicron outbreak will hit economic growth,” before stating, “Consumer spending would be stifled if inflation rises quicker.” The positive among these headlines were his expectations of easy inflation moving forward, which in turn suggests fewer hardships for the Reserve Bank of New Zealand (RBNZ) and the Pacific nation.
Elsewhere, Russia-Ukraine peace talks round 2.0 didn’t tumble like the first round of negotiations as policymakers agreed over a safe passage to civilians. However, Moscow remains determined to achieve its goal of operation in Kyiv and the same could challenge hopes of peace.
Furthermore, US ISM Services PMI eased for the third consecutive month in its latest release but the second-tier job data and Factory Orders came in positive. The same might have pushed Fed Chair Jerome Powell to reiterate his support for a 0.25% rate hike, actually showing readiness for a 0.50% rate-lift in the March meeting, which in turn favored the US Dollar Index (DXY), during the second round of testimony.
Amid these plays, US Treasury yields and Wall Street closed in red, despite initial positive performance.
Moving on, geopolitical headlines will join the chatters over the US Nonfarm Payrolls (NFP) to direct short-term NZD/USD moves.
Technical analysis
Unless providing a daily closing below the 50-DMA, around 0.6725 by the press time, NZD/USD remains directed towards the 100-DMA level surrounding 0.6845.