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On February 7th, Federal Reserve Vice Chairman Thomas Jefferson stated that the central banks current interest rate stance is "perfectly suited" to a robust economic situation, indicating that he is in no hurry to resume the rate cuts that the Fed paused in January. Jefferson noted that although inflation has consistently exceeded the Feds 2% target, he expects the downward trend in inflation to resume later this year. He also estimates the overall economic condition to be good, with economic growth projected to reach approximately 2.2% by 2026. He stated, "I see some signs that the labor market is stabilizing, inflation is poised to return to our 2% target, and sustainable economic growth will continue." Jefferson noted that the three rate cuts implemented by the Fed between September and December of last year adjusted interest rates to a range of 3.5% to 3.75%—close to market expectations of a "neutral level," a level that neither stimulates nor inhibits the economy. He pointed out that this stance strikes a reasonable balance between the two major risks facing the central bank.February 7th - On the evening of February 6th local time, following the conclusion of the US-Iran nuclear negotiations, Iranian Foreign Minister Araqchi left Muscat, the capital of Oman. Reportedly, in an interview after the negotiations, Araqchi stated that the Iranian delegation must return to Tehran to consult on "key issues" and prepare for future negotiations.Federal Reserve Vice Chairman Jefferson: Tariffs are a key driver of inflation in 2025, and price pressures should ease in 2026.Federal Reserve Vice Chairman Jefferson: Although upside risks remain, I expect inflationary pressures to ease.Federal Reserve Vice Chairman Jefferson: Tariffs are likely just a one-off change in price levels.

NZD/USD Price Analysis: Protects NZ Inflation-Induced Support Break; 0.6140 in Sight

Daniel Rogers

Apr 20, 2023 13:51

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During the mid-Asian session on Thursday, NZD/USD bears maintain control at the lowest levels in five weeks while defending New Zealand (NZ) losses caused by inflation near 0.6160. This justifies not only the weaker-than-anticipated New Zealand inflation, but also the recent break of one-month-old horizontal support, which is now immediate resistance, as well as the bearish MACD signals.

 

As measured by the Consumer Price Index (CPI), the Reserve Bank of New Zealand (RBNZ) policy purists were unpleasantly surprised by New Zealand's (NZ) first-quarter (Q1) inflation. Despite this, the Quarter-over-Quarter change in the New Zealand Consumer Price Index (CPI) decreases from 1.7% and 1.4%, respectively, to 1.2%.

 

Following the publication of disappointing data, the NZD/USD pair breached a one-month-old horizontal support level, which is now acting as a barrier near 0.6170. The bearish MACD signals are now directing NZD/USD traders toward a horizontal support level that has been in place for 1.5 months and is located near 0.6140.

 

If the NZD/USD bears remain dominant above 0.6140, the 2023 low of 0.6085 cannot be ruled out.

 

The 200-day simple moving average hurdle of 0.6220 becomes crucial for NZD/USD investors to return.

 

If the NZD/USD pair remains above 0.6220, a run up to the previous weekly high around 0.6315 and then to the monthly high of 0.6386 cannot be ruled out.


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