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IPC Index — Mexico Market- NZD/USD weakens as a stronger US Dollar gains on rising energy prices.
- US Dollar Index rises toward three-month highs above 99.50.
- The NZD remains under pressure as investors remain cautious amid escalating geopolitical tensions in the Middle East.
NZD/USD remains weaker for the third consecutive day, trading around 0.5900 during the Asian hours on Thursday. The pair declines as the US Dollar (USD) remains stronger, as surging energy prices heightened inflationary risks and reduced the likelihood of Federal Reserve (Fed) interest rate cuts.
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, rises toward three-month highs and is trading around 99.50 at the time of writing. Traders will now focus on the upcoming US Personal Consumption Expenditures (PCE) data due Friday for further policy clues.
US Consumer Price Index (CPI) released on Wednesday showed inflation rising 0.3% month-over-month (MoM) in February and 2.4% year-over-year (YoY), largely in line with market expectations. Core CPI, which excludes food and energy, increased 0.2% MoM and 2.5% YoY.
The relatively steady inflation figures reduced fears of a sudden surge in price pressures and reinforced expectations that the Federal Reserve may keep interest rates steady in the near term. Analysts note that the latest CPI report does not yet fully reflect the recent surge in oil prices caused by geopolitical developments.
The New Zealand Dollar (NZD) remains pressured as investors stay cautious amid rising geopolitical tensions in the Middle East. Surging energy prices are also fueling inflation concerns in New Zealand, with analysts expecting domestic price pressures to stay more persistent than previously anticipated, reinforcing expectations of further tightening by the Reserve Bank of New Zealand (RBNZ).
