The euro eased into the range of 1.0810s against the US dollar at the start of the Asian session yesterday(13/April). It was following the circulation of Russian President Vladimir Putin's latest statement regarding negotiations with Ukraine. 

That single Currency tried to move on when this news was written, but it still depreciated. On the other hand, the USD was propped up by the expectations of an increasingly established Fed rate hike.

That was despite the publication of the America’s inflation data last night missing expectations. The consumers price release of the United states showed that the core inflation growth was just 0.3%.

It was for monthly period and happened in March 2022. So, it was not 0.5% just like what people were expected. The yearly core inflation was also growth from 6.4% to 6.5%.

The Greenback Position was Shaken

The release above was not in line from the consensus prediction of 6.6%. Furthermore, that report was also shaking the greenback position in the New York session based on the data. 

However, that movement was relieved as soon as possible because of a statement from Lael Brainard as the federal reserve governor. He said for the second time since the beginning of this month. 

He stated that The Fed commits to continuing a series of rate hikes and streamlining the balance sheet in the coming months. There are also information that the high inflation is cooling down right now. 

Brainard said it was necessary to review developments in the months ahead to ascertain whether the moderation in the inflation rate continues

The US Dollar Is Getting Stronger Due to that Statement 

Furthermore, Brainard is the figure who had competed for the nomination of The Fed Chairman versus Jerome Powell. In fact, his statement supported the U.S. dollar exchange rate.

It can be seen that the USD index (DXY) cemented its position above the 100.00 threshold, although the momentum of the bullish rally has slowed. This major currency position is also supported by the continued depreciation of the euro.

That is especially amidst the Western versus Russian proxy war in Ukraine. In his first public communication since the withdrawal of Russian troops from Northern Ukraine, President Vladimir Putin revealed that negotiations with Ukraine.

Putin said that the discussion had reached the dead end condition. He said Russia would continue its military operations to realize all its targets in Ukraine where it means the tension will be continued. 

However, the most important strategic target is the collapse of the unipolar international order that the US built after the Cold War

Meanwhile, the Kiwi Dollar Slumped due to a Dovish Rate Hike

Elsewhere, The Reserve Bank of New Zealand (RBNZ) this morning raised the OCR rate by 50 basis points from 1.00% to a staggering 1.50%. This was the largest RBNZ rate hike in 22 years.

However, the New Zealand dollar exchange rate fell in the forex market. When this news was written, the NZD / USD was weakening for about 0.4% around the level of 0.6280.

The kiwi dollar was also defeated by it’s neighbour currency with the rocketing position of AUD/NZD for about 0.5%. It reached the highest position since March 2021.

RBNZ Confirmed the Last Month Rate Hike Prediction

In today's policy meeting, the RBNZ confirmed last month's forecast of a potential rate hike to more than 3 percent by the end of next year. That is needed because the inflation expectations remain high. 

However, the market has been taking that into account since last month's RBNZ meeting. The move made by this institution seems change the rate hike. It was from "installment" to "lump sum" in a short period. 

In fact, ahead of today's RBNZ meeting, market participants have even begun to take into account inflation expectations and a much higher hike for a longer time frame.