NZD/USD extends its upside around the mid-0.6000s, US data eyed

The NZD/USD pair holds positive ground for the fourth straight day during the early Asian session on Wednesday. The weaker US Dollar (USD) and US Treasury bond yields lend some support to the NZD/USD. The pair currently trades near 0.6054, getting 0.05% for the day.

On Tuesday, New Zealand’s Trade Balance came in at $-14.81B YoY in October versus $-15.41B prior. Meanwhile, the nation’s Exports improved to $5.40B in October versus $4.77B prior while Imports dropped to $7.11B from $7.20B in previous readings.

Furthermore, the New Zealand Dollar (NZD) upside is supported by the optimism over the outlook for China, its major trading neighbor. The People's Bank of China (PBOC) official reaffirmed their commitment to provide more policy support to the country's struggling real estate sector.

On the USD front, the Federal Open Market Committee (FOMC) members are still concerned that inflation will remain persistent or further rise. Participants continued to judge that monetary policy needed to remain restrictive enough to bring inflation down to the Committee's target of 2%. The markets anticipate that the Fed is done with the hiking cycle and the Fed funds futures market is pricing in rate cuts beginning in May 2024. This, in turn, drags the USD lower and acts as a tailwind for the NZD/USD pair.

Market participants will keep an eye on the US weekly Jobless Claims, Durable Goods Orders, and the University of Michigan Consumer Sentiment survey on Wednesday. Later this week, the US market will be closed on Thursday for the Thanksgiving holiday. On Friday, the New Zealand Retail Sales for the third quarter (Q3) and the US S&P Global PMI data will be released.