The NZD/USD pair is trading with a cautious tone around the 0.5830 region on Thursday, as the New Zealand Dollar (NZD) regains some traction following shifting geopolitical headlines.
The Australian Dollar extended its gains versus the Japanese Yen, driven by an improvement in risk appetite amid the two-week pause in the Middle East conflict between the US and Iran.
The NZD/USD pair rallies sharply on Wednesday, boosted by a double whammy: The de-escalation of the Middle East conflict and hawkish remarks by the Reserve Bank of New Zealand (RBNZ) Governor, Anna Breman, following the bank’s monetary policy meeting.
MUFG’s Senior Currency Analyst Lloyd Chan argues Singapore’s energy system and fiscal strength materially limit near‑term tail risks from Middle East tensions.
The US Dollar Index (DXY) holds firm near 99.10, supported by safe-haven demand late in the American session with expectations that the Federal Reserve (Fed) will remain cautious on easing.
BNP Paribas analysts assess that in the United States (USD), demand remains the main driver of inflation, though its contribution has eased from post‑Covid peaks.
The US Dollar Index (DXY) continued to grind lower during the front half of the US trading session on Wednesday, falling roughly 1% from the prior session's close near 100.00 to tag a low around 98.50 as the US-Iran ceasefire announcement triggered a broad wave of risk-on selling in the US Dollar.
The USD/CHF pair retreats some 0.85% on Wednesday after failing to clear the Tuesday daily high of 0.8011, as the pair slides beneath the 200-day SMA of 0.7940, as market sentiment gets lifted by a two-week ceasefire in the Middle East conflict.
OCBC strategists Sim Moh Siong and Christopher Wong highlight that USD/INR has dropped sharply as RBI’s targeted regulatory measures curbed speculative positioning and tightened market microstructure.
Silver (XAG/USD) trades with a positive bias on Wednesday, supported by a broadly weaker US Dollar following a two-week ceasefire agreement between the United States and Iran. At the time of writing, XAG/USD is trading around $74.50, up nearly 2% on the day after hitting an intraday high of $77.65.
Gold (XAU/USD) advances on Wednesday, yet trades off a three-week high of $4,857 hit earlier in the day, as falling Oil prices weighed on the US Dollar, which weakened to a four-week low in the US Dollar Index (DXY). At the time of writing, the XAU/USD pair trades at $4,735, up more than 0.70%.
The Minutes from the Federal Reserve’s (Fed) March meeting, released on Wednesday, reinforce the idea that the Fed is firmly in wait-and-see mode, but with a growing recognition that risks are becoming more balanced.
