NZ Dollar Rises; Traders Await Fed Rate Decision
July 30 2024 - 12:34AM
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The New Zealand dollar strengthened against other major
currencies in the early European session on Tuesday, as traders
await the two-day policy meeting of the Federal Reserve gets
underway later today, with investors hoping for dovish
guidance.
While the U.S. Fed is widely expected to leave interest rates
unchanged, traders will be looking to the accompanying statement
for additional clues about a possible rate cut in September.
The Bank of Japan may raise interest rates on Wednesday while
unexpected strength in U.K. services inflation has left the Bank of
England's meeting on Thursday on a knife edge.
Trading later in the day may be impacted by reaction to U.S.
reports on home prices, consumer confidence and job openings.
In the European session now, the NZ dollar rose to a 6-day high
of 91.53 against the yen, a 5-day high of 1.8338 against the euro
and a 4-day high of 1.1115 against the Australian dollar, from
early lows of 90.25, 1.8435 and 1.1149, respectively. If the kiwi
extends its uptrend, it is likely to find resistance around 96.00
against the yen, 1.78 against the euro and 1.09 against the
aussie.
Against the U.S. dollar, the kiwi edged up to 0.5901 from an
early low of 0.5868. The kiwi may test resistance around the 0.61
region.
Meanwhile, the safe-haven yen weakened against its major
counterparts in the European trading today.
In economic news, the unemployment rate in Japan came in at a
seasonally adjusted 2.6 percent in June, the Ministry of Internal
Affairs and Communications said on Tuesday. That was beneath
expectations for 2.6 percent, which would have been unchanged from
the May reading.
The jobs-to-applicant ratio was 1.23, shy of forecasts for 1.24
- which also would have been unchanged. The participation rate was
63.7 percent - exceeding expectations for 63.4 percent and up from
63.3 percent in the previous month.
The yen fell to a 4-day low of 167.95 against the euro, from an
early 5-day high of 166.19. On the downside, 174.00 is seen as the
next support level for the yen.
Against the pound and the U.S. dollar, the yen slipped to 6-day
lows of 199.48 and 155.22 from early highs of 197.50 and 153.62,
respectively. If the yen extends its downtrend, it is likely to
find support around 206.00 against the pound and 158.00 against the
greenback.
The yen slid to a 4-day low of 174.87 against the Swiss franc,
from an early high of 173.32. The yen may test support near the
179.00 region.
Against the Australia and the Canadian dollars, the yen dropped
to 6-day lows of 101.78 and 112.11 from early highs of 100.58 and
110.86, respectively. The yen is likely to find support near 108.00
against the aussie and 116.00 against the loonie.
Looking ahead, Eurozone flash GDP data for the second quarter
and consumer sentiment for July are due to be released in the
European session.
In the New York session, Germany's GDP data for July, U.S.
Redbook report, U.S. house price index for May, U.S. Consumer
Board's consumer confidence for July and U.S. Dallas Fed services
index for July are slated for release.
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