The NZD/USD pair moved higher as New Zealand dollar soared to a five-month high against the US dollar, as the outlook for global economy improved, and the New Zealand dollar and other currencies tied to growth rallied against greenback and other majors.
Moreover, the NZ government sold NZ$700 million of government bonds, which boosted the demand for the New Zealand currency as a higher-yielding currency and the successful sale eased fears over government finances and the confidence in the economy.
There are growing signs indicating that the Reserve Bank of New Zealand is to increase interest rates and investors see the possibility as soon as next month.
On the other hand, US policy makers said that rising inflation rate is transitory, which could prevent them from hiking interest rates following ECB. This fact could give the kiwi the strength to rise against greenback.
On Friday, New Zealand won’t release any fundamental data, yet the U.S. economy will end the week with more inflation data, as the consumer price index for March will be released at 12:30 GMT; inflation is expected with 0.4% rise compare with 0.5%, on the year inflation is expected to rise to 2.6% from 2.1% previous.
The total net TIC flows for February at 13:00 GMT. Last month it recorded a rise of $32.5 billion while the net long-term TIC flows was $51.5 billion a rise is to be a good support for the dollar on faith in the US economy and help cover the trade gap.
Industrial production for March will be released at 13:15 GMT and expected to show a rise of 0.5% compare with the last drop of 0.1%, the capacity utilization index for March could show a rise of 77.3% from the previous of 76.3%.
Finally, U.S. will release University of Michigan survey of consumer confidence sentiment during April at 13:55 GMT, the preliminary reading is expected to come at 69.0 compare with the previous reading of 67.5.
Originally posted here
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