Australian, NZ Dollars Extend Drop On Fed Rate Hike Concerns
September 14 2022 - 1:38AM
RTTF2
The Australian and NZ dollars extended their decline in the
European session on Wednesday, as risk sentiment soured after hot
U.S. inflation data, which fuelled concerns about the possibility
of a full percentage point hike at the Fed meeting next week.
Markets are now pricing in a 38% chance of a 100 basis-point
rate hike and a 62% possibility of a 75 basis-point move.
The two-year treasury yield jumped to a 15-year high of 3.80
percent, widening the yield curve gap with the benchmark 10-year
note.
The yield curve inversion widened, which is considered to be an
indicator of a recession.
Commodity prices are mostly lower, as the data diminished hopes
for a peak in inflation and stoked worries about more aggressive
Fed rate hikes to control inflation.
The aussie weakened to 1-week lows of 0.6705 against the
greenback and 96.26 against yen, off its early highs of 0.6748 and
97.60, respectively. The aussie is seen finding support around 0.64
against the greenback and 94.00 against yen.
The aussie pulled back from a prior high of 1.1235 against the
kiwi, with the pair trading at 1.1205. The currency is likely to
face support around the 1.10 region, if it drops again.
The aussie declined to a 5-day low of 0.8847 against the loonie
and a 6-day low of 1.4880 against the euro, from its early highs of
0.8883 and 1.4784, respectively. The aussie is poised to find
support around 0.86 against the loonie and 1.51 against the
euro.
The NZD/USD pair touched 0.5976, its lowest level since May
2020. Next key support for the kiwi is likely seen around the 0.58
level.
The kiwi dropped to more than a 2-month low of 1.6684 against
the euro and an 8-day low of 85.82 against the yen, down from its
previous highs of 1.6599 and 86.91, respectively. The next possible
support for the kiwi is seen around 1.68 against the euro and 83.5
against the yen.
Looking ahead, Canada manufacturing sales for July and U.S. PPI
for August will be released in the New York session.
Euro vs NZD (FX:EURNZD)
Forex Chart
From Aug 2024 to Sep 2024
Euro vs NZD (FX:EURNZD)
Forex Chart
From Sep 2023 to Sep 2024