NZD/USD plummets to six-week lows, post-Powell’s remarks, shiting sentiment sour – by christianborjon NZDUSD Majors CentralBanks Fed Inflation
’s job of restoring price stability towards the bank’s 2% target. Furthermore, he acknowledged that it will “require a sustained period of below-trend growth.” Consequently, sentiment shifted sour, with USIn the Asian session, the NZD/USD opened above the 0.6220 figure, fluctuating within the 0.6180-0.6220 range ahead of US economic data releases and Powell’s remarks on Jackson Hole.
Summarizing Powell’s remarks, he said that reducing inflation will “bring some pain to households and businesses” amidst a period of higher interest, softening labor market conditions, and sluggish economic growth. The Fed Chair reiterated that the Fed would “bring inflation back down to our 2% goal,” commenting that the central bank is taking rapid steps to curtail demand, so it better aligns to supply.
Jay Powell welcomed the July inflation figures but quickly added that a “single month improvement falls far short of what the Committee needs to see” regarding the direction of inflation. Powell noted that being around a neutral stance “was not a place to stop or pause,” pushing against the market’s perceptions of aUS economic calendar
unveiled the University of Michigan Consumer sentiment for August on its final release. American citizens’ sentiment improved to 58.2 vs. 55.2 estimates, while inflation expectations for a one-year horizon fell to 4.8% from 5.2% last month. Earlier on Friday, the Fed’s favorite inflation gauge, headline, and core Personal Consumption Expenditures price Indices for July. Headline PCE rose by 6.3% YoY, higher than the 6.2% estimated, while core PCE, which excludes volatile items, decelerates to 4.6% YoY vs. 4.7% forecast.
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