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MTrading Team • 2022-10-18

NZDUSD leads G10 gainers on firmer sentiment, upbeat NZ inflation

NZDUSD leads G10 gainers on firmer sentiment, upbeat NZ inflation

The risk-on mood continues to weigh on the US dollar during early Tuesday even if the GBPUSD bucks the uptrend. The reason could be linked to the sluggish US Treasury yields and downbeat US data, as well as a lack of major catalysts.

NZDUSD remained on the front foot and lead the G10 currency pair gainers as the upbeat risk profile joins strong readings of New Zealand’s Q3 GDP. AUDUSD comes second in the line and cheers the RBA Minutes’ failure to convince hawks.

That said, gold prices extend the recovery moves and oil also stays firmer amid fears of a supply crunch.

Additionally, BTCUSD and ETHUSD print a three-day uptrend amid the sluggish US dollar and ignoring regulatory negatives at the door.

Following are the latest moves of the key assets:

  • Brent oil snaps two-day downtrend while bouncing off a fortnight low, mildly up beat $92.50 at the latest.
  • Gold rises for the second consecutive day, up 0.30% at $1,660 by the press time.
  • USD Index stays indecisive after refreshing the eight-day low near 111.80.
  • FTSE, Eurostoxx and DAX are all up nearly 1.0% intraday as we write.
  • Wall Street closed in the green led by Nasdaq’s 3.438% upside on the day.
  • BTCUSD and ETHUSD are both up for the third consecutive day as buyers poke $19,700 and $1,340 levels respectively.
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Risk profile improves without much to cheer about…

Market players extend the week-start optimism and favored the riskier assets, by tracking Wall Street’s gains even as there prevails absolutely nothing to cheer about. That being said, the UK’s U-turn on mini-budget isn’t a cure to its fiscal problems while the EU still struggles with recession fears. Further, central bankers are hawkish and the policymakers also try to use other ways to defend currencies versus the US dollar.

On the contrary, a new tussle between the US and OPEC+ members joins the list of negative catalysts and favors oil prices although the White House showed readiness to use more of the Strategic Petroleum Reserve (SPR).

Further, upbeat New Zealand Q3 Inflation helps RBNZ to remain hawkish while RBA conveyed economic fears while also bracing to improve relations with China.

Elsewhere, cryptocurrencies also remain positive despite Three Arrows’ bankruptcy and Facebook’s quest for Web3.

⏫ 🟢 Strong buy: USDJPY

⏬ 🔴 Strong sell: ETHUSD

⬆️ 🟢 Buy: USD Index, USDCAD, Nasdaq, EURUSD

⬇️ 🔴 Sell: DAX, FTSE 100, gold, BTCUSD, AUDUSD

Risk catalysts are the key

Be it the EU’s tabling of the gas price cap or UK backbenchers’ plot to topple PM Liz Truss, not to forget Fedspeak, the qualitative factors are likely to direct markets during the rest of the day amid a lack of major data/events. The second-tier data from the EU, Germany, the US and Canada might not gain any attention and can let the present trend continue unless printing major moves.

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