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MTrading Team • 2023-06-28

NZDUSD drops 1.0% as Australia inflation lures RBA, RBNZ doves

NZDUSD drops 1.0% as Australia inflation lures RBA, RBNZ doves

NZDUSD leads the market’s bearish trajectory on early Wednesday as traders prepare for the top-tier central bankers’ speeches at the ECB Forum. Apart from the pre-event anxiety, the fresh blow to the US-China ties and upbeat US data, as well as disappointing Aussie inflation, also weighed on the risk appetite.

While the Kiwi pair dropped 1.0% and led the bears, the AUDUSD was second in the class as some on the street lick their wounds amid false hopes of RBA’s another hawkish surprise. That said, the US Dollar regains upside momentum after a two-day losing streak whereas the prices of gold renew a three-month low. However, crude oil prints mild gains amid higher inventory flow and fears of a supply crunch due to geopolitical fears surrounding Russia and China.

Elsewhere, EURUSD and USDJPY appear least affected by the firmer USD as ECB officials defend hawkish monetary policy while talks of Japan intervention gain acceptance.

It should be noted that BTCUSD and ETHUSD both drop more than 1.0% as traders fail to cheer US SEC’s relief to Bitcoin ETFs amid fears of more regulations ahead.

Following are the latest moves of the key assets:

  • Brent oil prints the first daily gains in three with mild gains near $72.70 at the latest.
  • Gold price drops for the second consecutive day to refresh three-month low near $1,910 at the latest.
  • USD Index consolidates weekly losses with minor gains near 102.60 as we write.
  • Wall Street closed with gains but Asia-Pacific shares edged lower. That said, equities in Europe and UK are also on the positive side to begin the trading day.
  • BTCUSD and ETHUSD print more than 1.0% intraday losses to around $30,200 and $1,850 by the press time.
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Dicey markets underpin risk-off mood

The cautious mood ahead of a slew of central bankers’ speeches keeps the market risk-averse on early Wednesday. Adding to the risk-off mood could be the strong US data underpinning the fears of higher rates, as well as of more US-China tension.

With this, the US Dollar regains upside momentum but the commodities play mixed tunes as traders await clarity of the latest moves.

As a result, bears struggle to keep the reins despite a lack of optimism.

On a different page, US SEC approves more Bitcoin ETFs but its fight with the industry leaders and fears of more regulations keep the BTCUSD and ETHUSD on the back foot.

  • Strong buy: USDCAD
  • Strong sell: ETHUSD, GBPUSD, Gold
  • Buy: USD Index, Nasdaq, USDJPY

Central bankers are in the spotlight

While the pre-event anxiety and upbeat US data join the US-China tension to offer initial direction to the markets, the central bankers’ statements at the ECB Forum will be crucial to watch for a clear guide. The reason could be linked to the policymakers’ hesitance in accepting the fact that the higher rates have recently negatively affected the respective economies.

May the trading luck be with you!