NZD/USD moves near 0.5950 amid US Dollar rebound, China data eyed

NZD/USD extends its losses as the US Dollar strengthens on improved US Treasury yields.

Downbeat Kiwi labor data raises speculation on RBNZ to halt interest-rate hike in December meeting.

Investors await China’s Trade Balance and Kiwi’s Inflation Expectations for Q4.

NZD/USD trades lower around 0.5950 during the Asian session on Tuesday, extending losses for the second straight session. On Monday, the US Dollar (USD) was initiated to recover recent losses on the back of improved US bond yields.

US Dollar Index (DXY) trades higher near 105.40, bouncing back from its two-month low. Additionally, the 10-year US Treasury yield rebounded from the six-week low observed on Friday, hovering near 4.63%, by the press time.

The NZD/USD pair saw a surge propelled by speculations that the US Federal Reserve (Fed) might pause its monetary policy tightening. This sentiment was fueled by last week's dovish policy decision by the Fed and the indication of a softening labor market through disappointing employment data from the United States (US). Furthermore, market participants price in multiple rate cuts by the end of year 2024.

On the Kiwi side, the NZD/USD pair could face pressure as the employment data took a toll. The Employment Change recorded a decline of 0.2% in the third quarter against the expected rise of 0.4%. Meanwhile, the Unemployment Rate increased as anticipated, rising to 3.9% from the previous 3.6%. These figures suggest that the Reserve Bank of New Zealand (RBNZ) is likely to keep its policy rate unchanged in November.

Market participants may keep an eye on China's Trade Balance data for October scheduled to be released later in the day. An exceeding print than expectations could potentially support the Kiwi pair. Moreover, New Zealand’s Inflation Expectations for Q4 will be eyed on Wednesday.