NZD/USD Recovering from Six-Week Low Ahead of US CPI Report
The New Zealand Dollar (NZD) has regained some ground against the US Dollar (USD), recovering from its six-week low. Despite this, the upside potential for NZD/USD seems limited ahead of the crucial US Consumer Price Index (CPI) report.
The US CPI data will provide more cues about the US Federal Reserve's policy path amid rising rate hike bets, bolstered by the upbeat US Nonfarm Payrolls (NFP) report and still sticky inflation. The accelerated 5.4% YoY rate in August for the US Producer Price Index (PPI) has prompted traders to add to bets for a Fed rate hike next week.
Escalating US-Iran tensions remain supportive of elevated crude oil prices, which shot to the highest level since May 21 on Thursday. The risk of a broader regional conflict and the geopolitical risk premium in play should further benefit the safe-haven Greenback.