Started by PocketOption, Sep 24, 2022, 05:10 am
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The New Zealand dollar is in negative territory for a fourth straight day. NZD/USD fell as low as 0.5803 in the Asian session, its lowest level since March 2020.
Putin threats, Fed hikes weighs on kiwi
The New Zealand dollar is in serious trouble. NZD/USD has slipped 2.2% this week, and September has been dreadful, with the kiwi declining by 4.3%. The New Zealand dollar is staggering from the double blow of an aggressive Federal Reserve and risk sentiment sliding due to ominous developments in .
e’s counter-offensive has sent n forces in retreat, and a furious Vladimir Putin has upped the ante. He has given the go-ahead for a lightning-fast referendum in occupied e, in order to annex these territories. As well, Putin has said that all options are on the table to defend “n territory” and has hinted at the use of nuclear weapons. Second, Putin has ordered a partial mobilization which could involve up to 300,000 n soldiers. These moves are a clear escalation in the conflict and predictably, risk appetite has decreased, sending the risk-sensitive New Zealand dollar lower.
With the Federal Reserve and a host of other central banks tightening policy this week, the spectre of a global recession looms ever closer. This has unnerved investors, who are flocking to the safety of the US dollar and other safe haven assets. The Fed raised rates by 0.75% on Wednesday in a move that was widely expected. Still, the Fed’s hike can be considered hawish, as it sent a clear message that it will be uncompromising in the fight against inflation, even if that results in the US economy tipping into a recession. The markets are expecting another 0.75% rate hike in October, and with relations between Moscow and the West worsening, the outlook for risk currencies such as the New Zealand dollar look grim.
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