Bearish NZDUSD in Regards to High US Bond Yields
Bearish NZDUSD in Regards to High US Bond Yields
The New Zealand dollar (NZD) has been under pressure against the US dollar (USD) in recent weeks, as the USD has been boosted by rising US bond yields. The NZDUSD pair is currently trading at 0.58100 as of 23 October 2023, down from a high of 0.62000 in early September.
There are a number of factors that are contributing to the bearish outlook for the NZDUSD. One of the most important is the rise in US bond yields. US bond yields have been rising sharply in recent months, as investors anticipate that the US Federal Reserve will continue to raise interest rates in an effort to combat inflation.
Rising US bond yields have made the USD more attractive to investors, as they offer higher returns than bonds from other countries. This has led to a sell-off of the NZD and other currencies against the USD.
Another factor that is weighing on the NZD is the New Zealand economy. The New Zealand economy is expected to slow in the coming months, as the country is hit by the same global economic headwinds that are affecting other countries. This is expected to weigh on the demand for the NZD, as businesses and investors become more cautious.
The technical outlook for the NZDUSD pair is also bearish. The pair has broken through a key upward sloping trendline, and is now trading below its 50-day and 200-day moving averages. This suggests that the downtrend is likely to continue in the near term.
What to watch for
There are a number of key events that could impact the NZDUSD pair in the coming weeks. One of the most important is the upcoming US Federal Reserve meeting. The Fed is expected to raise interest rates by 75 basis points at the meeting, which would further boost the USD.
Another key event is the release of the New Zealand GDP data on 26 October. If the data shows that the New Zealand economy is slowing, it could put further downward pressure on the NZD.
The New Zealand dollar (NZD) has been under pressure against the US dollar (USD) in recent weeks, as the USD has been boosted by rising US bond yields. The NZDUSD pair is currently trading at 0.58100 as of 23 October 2023, down from a high of 0.62000 in early September.
There are a number of factors that are contributing to the bearish outlook for the NZDUSD. One of the most important is the rise in US bond yields. US bond yields have been rising sharply in recent months, as investors anticipate that the US Federal Reserve will continue to raise interest rates in an effort to combat inflation.
Rising US bond yields have made the USD more attractive to investors, as they offer higher returns than bonds from other countries. This has led to a sell-off of the NZD and other currencies against the USD.
Another factor that is weighing on the NZD is the New Zealand economy. The New Zealand economy is expected to slow in the coming months, as the country is hit by the same global economic headwinds that are affecting other countries. This is expected to weigh on the demand for the NZD, as businesses and investors become more cautious.
The technical outlook for the NZDUSD pair is also bearish. The pair has broken through a key upward sloping trendline, and is now trading below its 50-day and 200-day moving averages. This suggests that the downtrend is likely to continue in the near term.
What to watch for
There are a number of key events that could impact the NZDUSD pair in the coming weeks. One of the most important is the upcoming US Federal Reserve meeting. The Fed is expected to raise interest rates by 75 basis points at the meeting, which would further boost the USD.
Another key event is the release of the New Zealand GDP data on 26 October. If the data shows that the New Zealand economy is slowing, it could put further downward pressure on the NZD.