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On Friday, Russian President Vladimir Putin said Russia will achieve its strategic goals in Ukraine, insisting that Russia is united behind the conflict. "Truth and justice are on our side," Putin said at the Victory Day parade on May 9. The entire country, society and people support the participants in the military action against Ukraine, "and this spiritual force always brings us victory." U.S. President Donald Trump previously posted on social media: "I hope both Russia and Ukraine can abide by an acceptable ceasefire agreement." "If the ceasefire agreement is not respected, the United States and its partners will impose further sanctions." Putin did not mention Trumps statement in his speech.On May 9, Germanys new Chancellor Merz said that Europe supports Trumps plan for a 30-day ceasefire between Russia and Ukraine, and that both the EU and the US are ready to increase sanctions pressure on Moscow if Moscow does not take peace talks seriously. Merz added that the EU and the US will continue to support Ukraine and increase aid when necessary, although he said Germany continues to oppose financing defense spending through joint EU debt. "We call on Russia to finally embark on the path of real peace talks," he said. "If this is not done, we will not hesitate to increase sanctions pressure together with our European partners and the United States."Bank of England Governor Bailey: The global economic environment is likely to continue to be challenging and more unpredictable than ever before.Bank of England Governor Bailey: Divergent voting often reflects a high degree of consensus on factors affecting the outlook.Bank of England Governor Bailey: Scenario analysis does not suggest a bias in the path of monetary policy.

NZD/USD finds support near 0.6220; a decline appears more probable due to China's Covid concerns

Alina Haynes

Nov 28, 2022 15:04

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China's anti-Covid shutdown protests have weakened commodity-linked currencies, resulting in a gap-down start of roughly 0.6220 for the NZD/USD pair. During the previous week, the New Zealand dollar dropped after failing to surpass the round-level barrier of 0.6300.

 

Individuals have taken to the streets in China to demonstrate their opposition against the zero-tolerance policy, leading to a rise in civil unrest. Due to Chinese leader Xi Jinping's conservative posture and authoritarian framework, global markets have become more risk-averse. This has created an economic expansion risk and may worsen the already shaky housing market. Increasing apprehensions about societal risks may also result in political instability, which may have long-lasting detrimental effects on economic structure.

 

Notably, New Zealand is one of China's most important trading partners, and instability in China could damage the New Zealand Dollar.

 

In the meantime, the US Dollar Index (DXY) is profiting from investors' liquidity as the demand for safe-haven assets surges. The USD Index is hovering around 106.20 and attempting to reduce volatility as China's anti-locking protests restrict the upside and predictions of a slowdown in the Federal Reserve's larger rate hike cycle limit the downside (Fed).

 

S&P500 futures are under heavy pressure from market players due to a risk-averse market mentality. In anticipation of Fed chief Jerome Powell's address on Wednesday, yields on 10-year US Treasuries have decreased to approximately 3.68 percent. The Fed Chair's speech could dispel suspicions about a pause to the Fed's current rate-hiking program.