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  • Macroeconomic data releases from China weighed on antipodeans.
  • US Dollar Index stays calm below 97.50 ahead of key events.
  • Coming up: FOMC Chairman Powell’s testimony and FOMC June meeting minutes.

The NZD/USD pair dropped to its lowest level in more than two weeks at 0.6568 during the early trading hours of the Asian session but retraced its fall to turn flat near 0.66 ahead of the American session.  

Earlier today, the data from China showed that inflation, as measured by the Consumer Price Index (CPI), declined 0.1% on a monthly basis in June and stayed unchanged at 2.7% on a yearly basis. The Producer Price Index came in at 0% annually in the same period to weigh on the antipodeans AUD and the NZD.  

Despite the sharp drop, however, the pair didn’t have a difficult time recovering its losses as investors are repositioning themselves ahead of today’s key events.  

At 14:00 GMT, FOMC Chairman Powell will be testifying before the Congress and talk about the current state of the economy and the policy outlook. Later in the day, the FOMC will release the minutes of the June meeting, which could have a significant impact on rate cut expectations and thus the greenback’s market valuation.

Previewing Powell’s statement today, “The dollar has been performing well over the last week but we would not chase it higher as Powell will presumably focus on the reasons why the Fed will cut in late July. (We doubt he’ll push back on easing expectations for fear of damaging business confidence and the stock market). DXY may stall around the 97.70/80 area,” ING analysts said.

Technical levels to consider