The Reserve Bank of New Zealand adopted a more accommodative policy on inflation, sending the Kiwi lower, while global stock markets remain bullish despite easing global inflationary pressures.
➡️ The Reserve Bank of New Zealand kept its official exchange rate at 5.50% as expected, but struck a more dovish note in its statement saying it had greater confidence that inflation is coming back under control. This sent the New Zealand dollar lower, with the NZD/USD currency pair which moved well today as the US dollar strengthened.
➡️ We have seen the stock markets continue with their bullish movements towards new all-time highs. This rally characterized today's Asian session, with stocks trading near their highs ahead of the Tokyo close. We are seeing new all-time high prices in the index NASDAQ 100 and in the broadest S&P 500 index. Most global stock indexes are bullish, with Japan again in focus today as the index Nikkei 225 rose very strongly to close at a new record not far from 42,000. Japan's TOPIX also rose today to trade at a new all-time high. These are bullish signals for stocks and trend traders will want to get involved here on the Long side.
➡️ Fed Chair Jerome Powell testified yesterday on the semi-annual monetary policy report before the Senate Banking Committee. The testimony was widely seen as neutral and had little effect on the US dollar. Powell said he wanted more evidence of falling inflation before moving forward with a rate cut. Naturally, major US indexes rose to new all-time highs following his comments. Treasury Secretary Yellen echoed Powell's previous comments that the labor market is no longer driving inflation.
➡️ Federal Reserve Chairman Powell will testify before the House of Representatives later today.
➡️ In the Forex market, the Australian dollar is the strongest major currency since Tokyo opened, while the New Zealand dollar is the weakest, highlighting the AUD/NZD currency pair . The US dollar lost a lot last week, but is gaining this week after approaching a support level and remains within a valid long-term uptrend.
Credit by DailyForex.com