NZD/USD: testing tactical support
The Reserve Bank of New Zealand made announcements regarding its monetary policy. The NZD/USD dropped.
New Zealand dollar is affected by jobs data
On Wednesday, the New Zealand dollar headed south following dismal jobs data,which heightened expectations that interest rates would be decreased, as traders awaited the end of the Fed’s two-day policy gathering.
In general, trading was thin due to holidays in Asia and the European Union. The vast majority of currency pairs fluctuated in tight ranges.
The Fed gathering took place after firm American economic data in April pushed the evergreen buck to a two-year maximum.
Against a group of currencies, the USD index headed south demonstrating an outcome of 97.381.
The common currency managed to rally versus the evergreen buck reaching $1.1234, which appears to be its highest outcome since April 23. On Tuesday, firm economic data in the euro zone backed some short covering from hedge funds, which have been betting against the euro.
The New Zealand dollar turned out to be the day’s key mover. It headed south by 0.5% after data revealed that employment suddenly decreased in the March quarter. As for the jobless rate, it slumped to 4.2%.
Financial markets responded by betting that a rate cut was more real. However, the Reserve Bank of New Zealand, whose policy meeting is expected to take place next week, has already told that most probably its next move will be down.
The New Zealand dollar revived from earlier minimums. Last it decreased by 0.2% being worth $0.6663.
As for the Australian dollar, it tacked on by 0.1% reaching $0.7059.
Accommodative monetary policy worldwide has kept volatility contained across financial markets, while the demand for risky assets headed north.
The UK currency went up by 0.3% reaching $1.3074.
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