Daily Forex Market Preview, 25/01/2018
The U.S. dollar was seen extending its declines on Wednesday after the comments from U.S. Treasury Secretary; Steven Mnuchin said that the U.S. administration preferred a weaker currency. Mnuchin, speaking at the World Economic Forum in Davos said that a weaker dollar was good for trade, while also talking about new tariffs and trade pacts.
New Zealand’s quarterly inflation data for the fourth quarter of 2017 showed that consumer prices rose less than expected at a pace of 0.1%. This was weaker than the forecasts of a 0.4% increase on the quarter. Annual inflation rate was seen rising at a pace of 1.6% compared to 1.9% previously.
Looking ahead, the ECB’s monetary policy is scheduled for today. Markets will be looking to the ECB’s statement and Draghi’s press conference while expecting to see no changes to the monetary policy. Later in the evening, Japan’s inflation data will be coming out. No changes are expected as inflation in Japan is expected to rise at a steady pace from the previous month.
NZDUSD 25-01-2018 Intra-day analysis
NZDUSD (0.7380): The New Zealand dollar fell after the release of the quarterly CPI data. However, the declines were limited as the Kiwi dollar was seen recovering on the back of a weaker USD. At the moment, NZDUSD is seen trading near the resistance level of 0.7354 level. We expect a potential reversal taking place at this level. Failure to post a higher high from the previous peak could potentially set the stage for NZDUSD to trade flat with the downside risks building up.