- NZD/USD reverses Monday’s recovery moves, pressured around intraday low.
- NZ Government removes tax relief over housing loan interest to tame the real-estate prices.
- Risk appetite worsens amid uncertainty over US debt limit, stimulus and China’s Evergande.
- Fed Chairman Powell’s testimony, headlines over stimulus and China will be important for fresh impulse.
NZD/USD takes offers around 0.7000, down 0.25% intraday during early Tuesday. The kiwi pair fails to keep the previous day’s rebound amid risk-off mood, also ignoring the New Zealand (NZ) government efforts to cool down the hot property prices.
Reuters came out with the news from New Zealand stating, “The New Zealand government released draft legislation on Tuesday that seeks to disallow property investors to deduct mortgage interest from their taxable incomes, in its attempt to cool a red-hot housing market.” Rising property prices are the main challenge for the Reserve Bank of New Zealand (RBNZ) policymakers for which they’re ready to uplift the interest rate.
Challenging the Kiwi pair’s moves is the uncertainty over the US debt limit extension and infrastructures spending bill. After the US Senate’s failures to advance a measure to suspend the federal debt ceiling and avoid a partial government shutdown, Treasury Secretary Janet Yellen pushed for swift address to resolve the debt limit issue. On the same line were comments from US Senate Democratic Leader Chuck Schumer who said, per Reuters, “Democrats will take further action this week to avoid a government shutdown and debt default.”
On Monday, House Speaker Nancy Pelosi showed optimism to tackle the deadlock of the US infrastructure stimulus bill the previous day but hinted at a lesser figure than President Joe Biden’s $3.5 trillion push.
It’s worth mentioning that prepared remarks of Fed Chair Jerome Powell for today’s testimony show the readiness of the US central banker to dial back the easy money and favored the US Dollar Index (DXY) earlier in Asia. Also negative for the NZD/USD prices were China's GDP forecast cut by Goldman Sachs and World Bank.
Amid these plays, S&P 500 Futures drop 0.20% while the US 10-year Treasury yields struggle around the three-month top.
Given the lack of major data/events at home ahead of the next weeks’ RBNZ, NZD/USD traders will keep their eyes on the aforementioned catalysts for fresh impulse.
Technical analysis
While a 100-pips area between 0.6985 and 0.7085 restricts short-term NZD/USD moves, bulls are less likely to take entries below the 200-DMA level surrounding 0.7115.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
USD/JPY flat-lines below 151.50 after soft Japanese CPI data
USD/JPY stays defensive below 151.50 after the release of a soft Japan's CPI report and mixed Industrial Production and Retail Sales data on Friday. Japanese verbal intervention also weighs on the pair amid the holiday-thinned conditions on Good Friday. US PCE inflation awaited.
AUD/USD buyers lack vigor above 0.6500 amid Good Friday trading lull
AUD/USD is trading listlessly above 0.6500 in the Asian session amid light trading on Good Friday. The Aussie pair shrugs off encouraging comments from China's FX regulator, as price action remains subdued ahead of the US PCE inflation data.
Gold flirts with record highs above $2,230, all eyes on US PCE data
Gold price flirts with record highs around $2,230 during the Asian session on Friday. The uptick of yellow metal is bolstered by the safe-haven flows amidst growing economic concerns and the prospect of interest rate cuts from the US Federal Reserve.
Optimism price could fall as nearly $90 million worth of OP tokens is due flood markets
Optimism volatility has shrunk in the ours leading to the network’s cliff unlock. It joins the likes of dYdX and Sui, which have similar events on their calendars. As token unlocks are often considered bearish catalysts, investors should brace for a reaction after the event.
Will they won’t they cut rates is the question of Q2?
There has been some significant push back from Fed and Bank of England members around the timing of rate cuts, and the Bank of Japan still haven’t physically intervened in the FX market to stem yen weakness although they are threatening to do so.