NZD/USD remains depressed near 0.6200 mark amid softer risk tone, modest USD strength – by hareshmenghani NZDUSD China RiskAversion Fed Currencies
ains depressed through the early European session and is currently placed around the 0.6200 mark, just a few pips above the daily low.
The global risk sentiment took a hit amid a wave of protests in China over the government’s zero-COVID policy, which has been fueling concerns about a deeper economic downturn. The anti-risk flow extends some support to the safe-haven US Dollar and turns out to be a key factor dragging the NZD/USD pair lower for the second straight day.
It is worth recalling that the minutes of the November FOMC meeting released last Wednesday showed that most policymakers agreed it would soon be appropriate to slow the pace of rate hikes. Furthermore, the markets are now pricing in a greater chance of a relatively smaller 50 bps lift-off at the December FOMC meeting.
Apart from this, an unprecedented 75 bps rate hike by the Reserve Bank of New Zealand last week supports prospects for the emergence of some dip-buying around the NZD/USD pair. This, in turn, makes it prudent to wait for strong follow-through selling before positioning for a deeper pullback. In the absence of any relevant
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