NZD/USD faces delicate hurdles around 0.6230, upside remains favored ahead of Jackson Hole
- NZD/USD has witnessed a mild correction after printing an intraday high of 0.6226.
- Investors are moving forward with a higher risk appetite for the event of Jackson Hole.
- RBNZ’s Orr speech at Jackson Hole will be keenly watched.
The NZD/USD pair has displayed a stalwart rally to near 0.6230 after remaining lackluster in the early Tokyo session. The asset auctioned in a 0.6186-0.6192 range and an upside break of the same has resulted in decent intraday gains. The major is expected to extend its gains after overstepping the delicate resistance around 0.6230.
The pair has got an adrenaline rush as the US dollar index (DXY) has surrendered the critical support of 108.40 and is declining further to near the round-level support of 108.00. Investors have preferred to dump the DXY and move forward with a higher risk appetite for the event of the Jackson Hole Economic Symposium.
The rationale behind the improved risk appetite of the market participants is the declining odds for the third consecutive 75 basis points (bps) interest rate hike by the Federal Reserve (Fed) in September. Considering the recent decline in top-tier US economic data, the Fed is expected to slow down the pace of hiking interest rates and may discuss a 50 bps rate hike at Jackson Hole.
On the kiwi front, investors have ignored the vulnerable NZ Retail Sales data, released in the Asian session. The economic data has landed at -2.3%, lower than the prior release of -0.5%. It is worth noting that higher price pressures should result in higher Retail Sales as households are needed to make more payouts to offset the increment in prices. However, the overall Retail Sales have declined, which indicates a serious slowdown in retail demand.
Going forward, investors will focus on the speech from Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr at Jackson Hole. RBNZ’s Orr is expected to discuss soaring pressures and may share the strategy of the RBNZ to combat the same.