NZD/USD moves below 0.5900 on negative global economic outlook

NZD/USD weakens as RBNZ’s inflation report suggests an economic slowdown.
Kiwi's Business Services Index fell from the previous reading of 50.7 to 48.9.
Downbeat Chinese inflation could impact the Kiwi Dollar.
US-China Presidential meeting is scheduled for Wednesday during the Asia-Pacific Economic Cooperation summit in San Francisco.

Akhtar Faruqui FXStreet

NZD/USD is caught in a losing streak, stretching for the sixth consecutive session. The pessimistic global economic outlook casts a shadow over the NZD/USD pair. The spot price trades lower around 0.5890 during the Asian hours on Monday.

The inflation report by the Reserve Bank of New Zealand (RBNZ) contributed to the weakening of the NZD/USD pair as New Zealand is a significant exporter of commodities. The report suggests a prevailing sentiment pointing toward an expected decrease in prices, possibly linked to an economic slowdown and diminished demand for goods and services. It seems like the anticipation is setting the stage for a shift in the economic landscape.

The Kiwi's Business NZ PSI for October paints a picture of the Services Index, which took a dip, falling from the previous reading of 50.7 to 48.9. This data might add to the strain on the Kiwi Dollar (NZD), suggesting it's facing additional challenges.

Chinese inflation recorded a yearly decline in October might dampen the outlook for global growth. This directly impacts the New Zealand Dollar (NZD), given its role as a major commodity exporter to China.

Market participants await the upcoming US-China Presidential meeting. Scheduled for Wednesday during the Asia-Pacific Economic Cooperation summit in San Francisco, this marks the first in-person meeting between President Biden and President Xi in a year. The agenda is extensive, covering global issues from the Israel-Hamas conflict to Russia's invasion of Ukraine, fentanyl production, and discussions around artificial intelligence.

US Dollar Index (DXY) moves sideways without a direction despite improved US Treasury yields, bidding around 105.80. The yield on a 10-year US bond coupon stands at 4.66%, up by 0.17% by the press time.

The recent hawkish remarks from Federal Reserve (Fed) Chair Jerome Powell couldn't lift the spirits of the Greenback. Powell voiced concerns that the current policies might not be robust enough to bring inflation down to the coveted 2.0% target.

US Dollar (USD) encounters a challenge following the release of preliminary US Michigan Consumer Sentiment data on Friday. The report indicates a decline in consumer mood, dropping from 63.8 in the previous month to 60.4 in November.

Traders are expected to focus on the US Consumer Price Index (CPI) scheduled to be released on Tuesday. Kiwi’s side is the Producer Price Index – Output to be released later in the week. Meanwhile, China’s Industrial Production and Retail Sales will be eyed on Wednesday.

NZD/USD: additional levels to watch

Overview
Today last price	0.5892
Today Daily Change	0.0002
Today Daily Change %	0.03
Today daily open	0.589

Trends
Daily SMA20	0.5875
Daily SMA50	0.5912
Daily SMA100	0.6007
Daily SMA200	0.6106

Levels
Previous Daily High	0.5938
Previous Daily Low	0.5877
Previous Weekly High	0.6002
Previous Weekly Low	0.5877
Previous Monthly High	0.6056
Previous Monthly Low	0.5772
Daily Fibonacci 38.2%	0.59
Daily Fibonacci 61.8%	0.5915
Daily Pivot Point S1	0.5865
Daily Pivot Point S2	0.5841
Daily Pivot Point S3	0.5805
Daily Pivot Point R1	0.5926
Daily Pivot Point R2	0.5962
Daily Pivot Point R3	0.5987

Author

Akhtar Faruqui

FXStreet

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

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