NZD/USD Slumps as Strong US Data Fuels Tightening Bets
The New Zealand Dollar (NZD/USD) fell by 1% on Wednesday to around 0.5670, following stronger US economic activity readings and bolstered expectations of further Federal Reserve tightening.
The US Composite PMI rose to 58.4 in September from 56.0 in August, while the Manufacturing PMI climbed to 57.0 versus 53.5 expected, and the Services PMI printed 58.7 against a 56.0 forecast.
As a result, the US Dollar Index (DXY) added 0.54% to around 101.10 after touching a two-month high, putting downward pressure on the pair.
Fed policy expectations shifted after last week's 25 basis point rate rise, which took the target range to 3.75%-4%. The CME FedWatch pricing put the probability of another hike in October at roughly 68%, up from about 55% a day earlier.
Technically, NZD/USD was at 0.5671, below the 100-period SMA at 0.5720 and the 200-period SMA at 0.5743; the RSI (14) stood at 29.15.