NZD/USD juggles around 0.5750 as the focus shifts to US GDP data

The NZD/USD pair has delivered a north-side break of the consolidation formed in a narrow range of 0.5740-0.5752 in the early European session. The asset is advancing towards the round-level resistance of 0.5800 as the risk-on impulse is aiming to regain the glory.

S&P500 futures witnessed a vertical fall in early Asia led by weaker guidance from tech-giant Microsoft (MSFT), however, the three-day buying spree in the 500-stock basket indicates sheer optimism in the overall market structure. The US dollar index (DXY) is struggling to sustain above 111.00 and a subdued performance could accelerate volatility in the counter.

Meanwhile, returns on US government bonds are declining sharply amid positive market sentiment. The 10-year US Treasury yields have dropped to 4.07% and have still not displayed any sign of exhaustion.

For further guidance, investors are awaiting the release of the US Gross Domestic Product (GDP) data. As per the projections, the US economy has grown at 2.4% rate vs. a decline of 0.6% reported earlier in the third quarter of CY2022. It would be worth watching the placement of the GDP figures in comparison with the projections as Monday’s PMI numbers reported by S&P were lower than expectations.

But before that, the US New Home Sales data will display the condition of the US real estate market. The economic catalyst is seen lower at 0.585M vs. the prior release of 0.685M on a monthly basis. In addressing mounting inflationary pressures, the Federal Reserve (Fed) is continuously accelerating interest rates. This has resulted in higher interest obligations for households, which has forced them to postpone their demand for new homes.

In early Tokyo, ANZ Business Confidence dropped further to -42.7 against the projections of 42.0 and the prior release of -36.7. The kiwi dollar didn’t react much to the qualitative data, therefore, the entire focus will remain on the DXY’s movement and risk profile.