- NZD/USD remains under selling pressure amid a rally of the US Dollar.
- The hawkish stance from the Federal Reserve (Fed) boosts the USD against the New Zealand Dollar (NZD).
- The US Core Personal Consumption Expenditure (PCE) Price Index data will be a closely watched event this week.
The NZD/USD pair trades in negative territory for two straight days during the Asian session on Wednesday. The uptick in the pair is bolstered by the stronger US Dollar (USD) and risk aversion. The pair currently trades near 0.5932, down 0.20% for the day.
Tuesday's economic data revealed that US Conference Board (CB) Consumer Confidence rose to 103.0 in September from 108.7 in August. The figures reached their lowest level in four months, reflecting the impact of rising interest rates and political uncertainty. In August, Building Permits came in at 1.541M from the previous month's figure of 1.44M. The House Price Index for July increased to 0.8% MoM from 0.4% in the prior reading, exceeding the consensus estimate of 0.5%. August New Home Sales decreased -8.7% from July's rise of 8%.
The Federal Reserve (Fed) decided to hold interest rate unchanged in the 5.25% to 5.50% range in its September meeting last week. In terms of macroeconomic predictions, most members still expect further rate rises later this year. Minneapolis Federal Reserve Bank President, Neel Kashkari stated on Tuesday that he is one of the Fed policymakers who sees one more rate hike this year. He added that US rates probably have to go a little bit higher and be held there for longer, to cool things off. The hawkish stance from the Federal Reserve (Fed) boosts the USD against the New Zealand Dollar (NZD) and acts as a headwind for the NZD/USD pair.
On the Kiwi front, the markets appear to have priced in an Official Cash Rate (OCR) rate hike by the Reserve Bank of New Zealand (RBNZ) through the end of 2023 as the New Zealand economy indicates to be more resilient than initially expected. About the data last week, New Zealand’s Trade Balance (NZD) dropped to $-2,291M MoM in August versus $-1,107M prior. The annual trade deficit improved to $15.54B for the said month versus $-15.88B prior figures.
Looking ahead, New Zealand’s Business Confidence for September and ANZ Roy Morgan Consumer Confidence will be due on Thursday and Friday, respectively. On the US docket, the US Durable Goods Orders report will be released on Wednesday. The focus will shift to the Fed's preferred measure of consumer inflation, the Core Personal Consumption Expenditure (PCE) Price Index, scheduled for release on Friday. It is anticipated that the annual rate will decline from 4.2% to 3.9%. Traders will take cues from the data to find AUD/USD trading opportunities.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD rebounds from multi-week lows, trades above 1.0750
EUR/USD came under heavy bearish pressure and declined to its weakest level in three weeks below 1.0750 on Friday after the stronger-than-expected Nonfarm Payrolls data. Week-end flows, however, helped the pair erase its daily losses.
GBP/USD remains on track to snap three-week winning streak
GBP/USD recovered toward 1.2550 after coming in within a touching distance of 1.2500 in the second half of the day after Nonfarm Payrolls came in at 199,000 for November. Despite the recent rebound, the pair remains on track to snap a three-week winning streak.
Gold retreats below $2,020 as US yields push higher
Gold broke below its daily range and declined toward $2,010 with the immediate reaction to the upbeat US November jobs report. Although XAU/USD managed to recover toward $2,020, rising US Treasury bond yields triggered another leg lower.
Bitcoin price could retrace to $42,000 if US Nonfarm Payroll comes in at 180,000
Bitcoin price just like other assets, is highly impacted by the macro-financial developments. This includes the Nonfarm Payrolls (NFP) report released by the BLS of the United States.
The week ahead – Fed, ECB and Bank of England rate decisions
When the Federal Reserve kept rates unchanged back in November for the second meeting in a row there was still the distinct possibility that the final meeting of 2023 would provide the possibility of one more rate rise to round off the year in line with Fed policymakers dot plot forecasts of 5.6%.