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Hang Seng Index futures closed up 1.34% at 22,837 points in the night session, 174 points higher than the previous session.German Chancellor Merz: It is normal that some coalition members voted against me.According to the Financial Times: Britain and the United States are about to reach a low-tariff trade agreement.On May 7, according to the results of the U.S. 10-year Treasury auction on Tuesday, the undergraduate loan interest rate in the United States for the 2025-26 academic year is expected to be 6.39%. The annual interest rate calculation formula is usually based on the yield of the May auction, plus 2.05 percentage points. The figure of 6.39% is slightly lower than last years 6.53%, but it is still close to the highest level since the Great Recession in 2008. Under federal law, the upper limit of the loan interest rate is 8.25%.Karen Manna of Federated Hermes said on May 7 that Federal Reserve Chairman Powell may not be able to satisfy investors thirst for clarity when he speaks to reporters after tomorrows interest rate decision. The Fed is expected to keep interest rates unchanged, and Powell may face questions about the impact of tariffs on inflation and the economy. The final level of tariffs and their duration remain unknown, which limits Powells ability to provide more clear information. "Forecasting is always difficult, and it is almost impossible to make forecasts when the target is constantly changing." She expects this uncertainty to continue until the Feds June meeting unless there are substantial changes.

NZD/USD Drops Below 0.6620 Due to Fed's Progressive Rate Hike Expectations

Larissa Barlow

Apr 25, 2022 10:40

The NZD/USD pair has fallen below last week's low of 0.6626, extending Friday's losses. The asset has fallen sharply in the last two trading sessions after repeatedly failing to sustain above the round level resistance of 0.6780. The risk-off market environment has lowered demand for risk-perceived assets, and given the price action, a downward trend is projected to take the asset to approach yearly lows near 0.6529.

 

Since Thursday's announcement of the New Zealand Consumer Price Index (CPI), the kiwi has been underperforming against the greenback. The annual New Zealand CPI came in at 6.9 percent, missing expectations of 7.1 percent and matching the prior print of 5.9 percent. Although a lower-than-expected inflation reading weighed on the kiwi, it did not diminish the likelihood of further rate hikes by the Reserve Bank of New Zealand (RBNZ). RBNZ Governor Adrian Orr stated in his most recent monetary policy statement that inflation is soaring and that raising interest rates is the only way to mitigate inflation risks. As a result, the RBNZ's policymakers will maintain their hawkish advice and push inflation below the target rate of 2% sooner.

 

Meanwhile, increased probabilities of a Federal Reserve (Fed) rate hike are pushing the US dollar index (DXY) higher. The DXY is comfortably over 101.00 and is projected to extend gains this week as investors anticipate higher Durable Goods Orders. Monthly Durable Goods Orders are expected to come in at 1%, compared to the prior estimate of -2.1 percent. Additionally, investors will retreat behind the greenback in the run-up to the Federal Reserve's monetary policy statement in May.

NZD/USD

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