NZD/USD moves below 0.5800, aims to reach November’s low
|- NZD/USD weakens as investors ease expectations for a rate hike by the RBNZ.
- Geopolitical uncertainties weigh on the New Zealand Dollar.
- Risk sentiment worsens on Israel's PM Netanyahu's statement about a ground assault in Gaza.
- The surge in US Treasury yields reinforces the US Dollar.
NZD/USD marks an 11-month low, hovering around 0.5790 during the Asian session on Thursday. The pair could reach November’s low during the session.
The Kiwi Dollar grapples with pressure, a predicament exacerbated by the recent release of headline Consumer Price Index (CPI) data. This sentiment is prompting investors to ease their expectations for an interest rate hike by the Reserve Bank of New Zealand (RBNZ).
New Zealand’s third-quarter CPI rose to 1.8%, falling short of the anticipated 2.0%. The yearly rate experienced a deceleration to 5.6% from the previous quarter's 6.0%, further undershooting consensus estimates of a 5.9% reading.
Geopolitical uncertainties cast a shadow on the New Zealand Dollar, as risk sentiment takes a hit. The latest trigger seems to be Israel's Prime Minister Benjamin Netanyahu's statement about a potential ground assault in Gaza, with the timing contingent on consensus. This reinforces the prevailing risk-off sentiment, contributing to the downward pressure on the NZD/USD pair.
Additionally, Iran's Foreign Minister Hossein Amir-Abdollahian visited the US to discuss the conflict between Hamas and Israel, according to Iranian media.
The US Dollar Index (DXY) continues to gain ground, bidding higher around 106.80 at the time of writing. The US Dollar (USD) is bolstered by the recent surge in US Treasury yields, aiming to revisit above 5.0%. By the press time, the 10-year Treasury note stood at 4.97%.
However, the NZD/USD pair's losses might find some limitation amid the varied comments from US Federal Reserve (Fed) officials in the previous days, concerning the trajectory of interest rates. Atlanta Fed President Raphael Bostic indicated that a rate cut before the middle of next year is improbable, and Fed Philadelphia President Patrick Harker voiced a preference for keeping interest rates unchanged.
US Q3 Gross Domestic Product (GDP) figures could provide a crucial snapshot of economic performance later in the North American session. Following that, Friday unveils the Core Personal Consumption Expenditures (PCE) data, offering insights into changes in the prices of goods and services in the United States. In the Kiwi realm, all eyes are on Friday's Consumer Confidence, a key indicator for gauging sentiment and economic outlook.
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