New Zealand dollar rose in European trade against a basket of major rivals, extending gains for the fifth straight session against US dollar and scaling five-week highs.

The gains come amid bullish outlook for the New Zealand dollar at upcoming meetings following recent New Zealand data.

NZD/USD rose 0.6% to 0.6316, the highest since April 4, with a session-low at 0.6263. 

Kiwi rose 0.2% on Friday against US counterpart, the fourth profit in row as the greenback weakened overall.

Highest Performing Currency

Kiwi spiked today to five-week highs against both the euro and the US dollar, and four-week highs against sterling and Swiss franc, and give-month highs at yen at 85.80.

New Zealand Labor Data

Recent data showed New Zealand's employment rose 0.8% in the first quarter, improving from a 0.5% increase in the previous reading, and beating estimates of a 0.4% increase.

Such data showed the resilience of the labor sector and increases pressure on the central bank.

RBNZ

The Reserve Bank of New Zealand raised interest rates at the April 5 meeting by 0.5%, beating estimates of a 0.25% increase, to 5.25%, the highest since October 2008.

The RBNZ said that inflation remains high in the short term, raising risks of inflation in upcoming months.

New Zealand Rates

RBNZ's outlook for February shows interest rates need to reach 5.5% to bring inflation under control.

It shows the bank expects another 0.25% rate hikes at the upcoming May 24 meeting. 

Gold prices muscled up in European trade, resuming gains after profit-taking off record highs, as the precious metal holds above $2,000 with the dollar losing ground. 

US banking and financial risks remain too high in the US, with the Federal Reserve directly hinting at an end to the policy tightening cycle. 

Prices Today

Gold prices rose 0.4% to $2,2024 an ounce, with a session-low at $,2014 an ounce after losing 1.6% on Friday, the first loss in four days on profit-taking off record highs at $2,081. 

Gold was previously hurt as well due to strong US payrolls data for April, which showed continued tight conditions in the US labor market.

The precious metal rose 1.4% last week, the second weekly profit in a row on strong haven demand as the US banking sector deteriorates. 

The Dollar

The dollar index fell 0.2% on Monday for another session against a basket of major rivals, underpinning dollar-denominated gold prices.

The greenback continues to suffer from higher US financial risks which threatens to send the US into recession as local banks continue to struggle. 

Now investors follow news from US Congress as lawmakers attempt to reach a compromise on the US debt ceiling crisis, with US Treasury Secretary Janet Yellen warning the US government might not pay its debts by the first of June.

The Fed

The Federal Reserve was clearly less bullish at its last meeting, which indicates the bank will likely end the current cycle of policy tightening soon. 

Analysts expect that any sign of a slower inflation will hurt the greenback further and will impose a more bearish outlook for US interest rates, in turn boosting gold prices towards $2,100.

The SPDR

Gold holdings at the SPDR Gold Trust rose 1.73 tones on Friday, the second increase in a row to 931.77 tones, the highest since April 12. 

Euro rose in European trade against a basket of major rivals, extending gains for the second session against dollar and moving in a positive zone on prospects for multiple more rate hikes by the European Central Bank.

Dollar extended its losses after the Federal Reserve directly hinted at pausing policy tightening and ending the current cycle of interest rate hikes, with investors now awaiting data on US banking lending levels. 

EUR/USD rose 0.25% to 1.1050, with a session-low at 1.1014, after rising 0.1% on Thursday, the third profit in four days on banking pressures in the US.

ECB

European Central Bank President Christine Lagarde said in the post-ECB meeting press conference that inflation outlook remains high in the euro zone.

Thus, the ECB decided to raise interest rates by 25 basis points to 3.75%, the highest since 2008.

Lagarde said everyone agreed on the necessity of rate hikes with more space to cover, making it clear the ECB is preparing for more rate hikes.

Lagarde noted that some members went as far as asking for a 0.5% rate hike this month.

Lagarde also said the decision today was eventually agreed upon unanimously amid a collective aim to combat inflation.

European Rates

Markets continue to price in two more 0.25% rate hikes in June and July to combat stubborn inflation.

Deutsche Bank has maintained its European interest rate outlook at 4.25%, expecting two more rate hikes in the summer.

The Dollar

The dollar index fell 0.2% on Monday, extending losses for the second session against a basket of major rivals. 

The Federal Reserve directly hinted at the end of the current cycle of policy tightening, after raising interest rates 7 times in 2022, during March, May, June, July, September, November, and December.

Now investors follow news from US Congress as lawmakers attempt to reach a compromise on the US debt ceiling crisis, with US Treasury Secretary warning the US government might not pay its debts by the first of June. 

Canadian dollar rose on Friday after strong Canadian labor data earlier today.

According to the official data, the economy added 41.4 thousand new jobs in April, while analysts expected an addition of 21.6 thousand jobs. 

Unemployment stabilized at 5%, same as before, while analysts expected an increase to 5.1%. 

CAD/USD rose 1.2% as of 20:39 GMT to 0.7471. 

Dollar

The dollar index fell 0.2% as of 20:22 GMT to 101.2, with a session-high at 101.7, and a low at 101.1. 

Data

Recent data showed US unemployment claims fell to 3.4% in April, from 3.5%, beating estimates of 3.6%.

US economy added 253 thousand new jobs in April, beating estimates of 181 thousand, and up from 165 thousand in March.

Aussie

Australian dollar rose 0.8% against US dollar as of 20:39 GMT to 0.6750.