Market Analysis

The New Zealand dollar continues to gain ground

FOREX

The New Zealand dollar continued to gain ground on the US dollar during early Thursday trading, testing the resistance level at $0.73. The kiwi has risen more than 1% since Wednesday’s publication of a surprising forecast in the Reserve Bank of New Zealand’s policy statement that projected a hike in interest rates may come as early as September 2022. The RBNZ became the first major central bank to break ranks and concede that the sudden acceleration in economic activity could unleash inflationary pressures that are more than just transitory and require earlier tapering of the current loose monetary policy. This early move could pave the way for further gains for the kiwi.

Ricardo Evangelista – Senior analyst, ActivTrades

 

GOLD

The dollar’s recovery attempt hasn’t curbed the strength of gold seen in the last few days. The price is challenging the resistance zone at $1,900, while the main trend still appears positive for bullion as investors’ interest for gold has returned. From a technical point of view, gold looks on track to continue its recovery, with a potential target in the $1,940-$1,950 area. Vice versa, a fall below $1,870 would be the first sign of weakness.

Carlo Alberto De Casa– Chief analyst, ActivTrades

 

EUROPEAN SHARES 

Markets opened on a mixed tone on Thursday, with gains in Stockholm offset by losses in Frankfurt amid a cautious trading stance from investors ahead of a busy macro day. Investors are bracing for another significant batch of US data today ahead of next week’s NFP release, which is likely to significantly increase market volatility in the afternoon. Market operators know monetary policies will have to tighten eventually, but everyone will be cautiously monitoring new macro data to assess the speed with which central banks may reduce their dovish approach. Meanwhile, investors will also pay attention to the first round of trade talks between Washington and Beijing since President Biden’s election. Inflation is likely to remain the main market driver in the coming weeks and months but an evolution of the relationship between the world’s two biggest economies is also likely to impact stock markets.

Pierre Veyret– Technical analyst, ActivTrades

 

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