NZD/USD PARES INTRADAY LOSSES ABOVE 0.6200 AS YIELDS WEIGH ON US DOLLAR AHEAD OF US PMI I

NZD/USD trims intraday losses around 0.6240 during early Friday morning as market sentiment dwindles during the first loss-making day in three.

The Kiwi pair’s latest rebound could be linked to the dovish concerns surrounding the Federal Reserve’s (Fed) next move, as well as the downbeat yields. That said, the Fed’s heavy lending amid the banking rout flags fears of a ballooning Fed balance sheet, which in turn renews hawkish calls for the US central bank’s next moves. However, the mixed US data and the latest Fed statement appear to challenge the policy hawks. Also challenging the US Dollar could be the comments from key market players like DoubleLine’s Gundlach who recently reiterated his dovish bias for the US central banks.

Elsewhere, comments from US Treasury Secretary Janet Yellen and the Chair of the Basel Committee on Banking Supervision, portraying the market’s fears of banking fallouts, also weigh on the market’s mood and challenge the NZD/USD buyers. However, the recent retreat in the yields keeps the pair buyers hopeful.

In this regard, the Financial Times (FT) recently mentioned said that the head of the world’s top financial regulator, Pablo Hernández de Cos, has called for tighter rules to clamp down on risks spreading from so-called “shadow banks” to other parts of the banking system. On the other hand, US Treasury Secretary Janet Yellen said on Thursday, “China and Russia may want to develop an alternative to the US dollar,” while also showing preparedness for additional deposit actions `if warranted'.