NZDUSD displays topsy-turvy moves around 0.6150 post-Poland noise, US Retail Sales eyed
- NZDUSD turns sideways as investors await more development on Russia-Poland tensions.
- NATO Ambassadors to meet on Wednesday as Poland exercises Alliance’s Article 4.
- An improvement in US Retail Sales despite a decline in inflation indicates robust retail demand.
The NZDUSD pair is witnessing a volatility contraction around the crucial hurdle of 0.6150 in the early Asian session. The asset witnessed an escalation in standard deviation on Tuesday after Poland's economy reported an attack by Russian rebels through two stray missiles. This led to a resurgence in the risk-off mood, however, the overall optimism regained glory.
The asset sensed selling pressure from the round-level resistance of 0.6200 and eased the majority of gains recorded on early Tuesday. Later, it turned sideways as expansion in volatility can be tamed by a period of contraction in the same.
Meanwhile, the US dollar index (DXY) has eased after a vertical movement to near 107.00 from a fresh three-month low of 105.34. Uncertainty amidst the Russian attack on NATO-member Poland is expected to remain for a while. In response to Russian military activity, Poland's administration has requested NATO Ambassadors to meet on Wednesday by enforcing Alliance’s Article 4, reported Reuters.
The returns on US government bonds are continuously losing their all support areas as the market participants don’t see the continuation of the 75 basis points (bps) rate hike structure by the Federal Reserve (Fed). The 10-year US Treasury yields have dropped to 3.77% and are expected to remain on tenterhooks ahead.
On Wednesday, the US Retail Sales data will remain in the spotlight. The economic data is seen higher at 0.9%vs. the prior release of 0%. An increment in Retail Sales data despite a decline in headline CPI figures in October indicates a robust demand by the households.
Meanwhile, Kiwi bulls are still solid on optimism fueled by upbeat Business NZ PSI data. The economic catalyst landed higher at 57.4 vs. the prior release of 55.9%. This week, the NZ economic calendar has nothing important to offer, therefore, the entire focus of investors will remain on geopolitical events for further guidance.