- 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.
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 consolidates below 1.0900 following Wednesday's rally
EUR/USD trades in a tight range below 1.0900 after registering impressive gains on Wednesday. The US Dollar struggles to stage a rebound following the CPI-inspired selloff as investors await mid-tier data releases and comments from Fed officials.
GBP/USD corrects lower after testing 1.2700
Following Wednesday's upsurge, GBP/USD stretched higher and touched a fresh multi-week high at 1.2700 in the Asian session on Thursday. With the market focus shifting to US Jobless Claims data, the pair corrects lower in the European trading hours.
Gold price drifts higher as US CPI inflation fuels Fed rate cuts
The Gold price gains traction amid the weaker US Dollar on Thursday. The recent CPI report showed inflation in the US slowed in April, prompting market players to increase their bets on the US Fed rate cuts this year.
DOGE’s 15% upside potential hinges on Bitcoin holding above $65K
Dogecoin price is trading with a bullish bias, leading meme coins north as sector bulls resurface. This show of hand comes after Bitcoin price broke past the $65,000 threshold and could extend if the pioneer cryptocurrency holds above this level.
Dow Jones Industrial Average soars 350 points, sets new all-time high as rate cut hopes surge
The Dow Jones Industrial Average clipped into a fresh all-time high on Wednesday, gaining almost nine-tenths of a percent during the US market session after US Consumer Price Index inflation slipped further back.