- NZD/USD meets with a fresh supply on Tuesday and is pressured by a combination of factors.
- The RBNZ’s dovish outlook, China’s economic woes and trade war fears undermine the Kiwi.
- Bets that the Fed will pause its easing cycle and elevated US bond yields boost benefit the USD.
- Traders look to the US Retail Sales for some impetus ahead of the Fed decision on Wednesday.
The NZD/USD pair attracts fresh sellers in the vicinity of the 0.5800 mark and extends its steady intraday descent through the first half of the European session on Tuesday. Spot prices drop to the 0.5755 area in the last hour and remain close to the lowest level since October 2022 touched on Monday.
The New Zealand Dollar (NZD) continues with its relative underperformance on the back of the Reserve Bank of New Zealand's (RBNZ) dovish stance and bets for a more aggressive policy easing by the central bank. Apart from this, concerns about China's economic recovery and the US-China trade war turn out to be another factor undermining antipodean currencies, including the Kiwi. This, along with the emergence of some US Dollar (USD) did-buying, is seen exerting some downward pressure on the NZD/USD pair.
Investors now seem convinced that the Federal Reserve (Fed) will slow the pace of its rate-cutting cycle next year amid signs that the progress on bringing inflation to 2% has stalled. Moreover, speculations that US President-elect Donald Trump's policies may lead to an increase in government borrowing, and boost inflation, remain supportive of elevated US Treasury bond yields. This, along with geopolitical risks stemming from the worsening Russia-Ukraine war and tensions in the Middle East, benefits the safe-haven buck.
Traders now look forward to the release of the US monthly Retail Sales figures for short-term opportunities later during the early North American session. The focus, however, will remain on the outcome of the crucial two-day FOMC meeting on Wednesday. Investors will closely scrutinize the accompanying policy statement and Fed Chair Jerome Powell's speech for cues about the future rate-cut path. This, in turn, should influence the near-term USD price dynamics and provide a fresh directional impetus to the NZD/USD pair.
Economic Indicator
Retail Sales (MoM)
The Retail Sales data, released by the US Census Bureau on a monthly basis, measures the value in total receipts of retail and food stores in the United States. Monthly percent changes reflect the rate of changes in such sales. A stratified random sampling method is used to select approximately 4,800 retail and food services firms whose sales are then weighted and benchmarked to represent the complete universe of over three million retail and food services firms across the country. The data is adjusted for seasonal variations as well as holiday and trading-day differences, but not for price changes. Retail Sales data is widely followed as an indicator of consumer spending, which is a major driver of the US economy. Generally, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Read more.Next release: Tue Dec 17, 2024 13:30
Frequency: Monthly
Consensus: 0.5%
Previous: 0.4%
Source: US Census Bureau
Retail Sales data published by the US Census Bureau is a leading indicator that gives important information about consumer spending, which has a significant impact on the GDP. Although strong sales figures are likely to boost the USD, external factors, such as weather conditions, could distort the data and paint a misleading picture. In addition to the headline data, changes in the Retail Sales Control Group could trigger a market reaction as it is used to prepare the estimates of Personal Consumption Expenditures for most goods.
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 accelerates losses to 1.0930 on stronger Dollar
The US Dollar's recovery regains extra impulse sending the US Dollar Index to fresh highs and relegating EUR/USD to navigate the area of daily troughs around 1.0930 in the latter part of Friday's session.
GBP/USD plummets to four-week lows near 1.2850
The US Dollar's rebound keep gathering steam and now sends GBP/USD to the area of multi-week lows in the 1.2850 region amid the broad-based pullback in the risk-associated universe.
Gold trades on the back foot, flirts with $3,000
Gold prices are accelerating their daily decline, steadily approaching the critical $3,000 per troy ounce mark as the Greenback's rebound gains extra momentum and US yields tighten their retracement.
Can Maker break $1,450 hurdle as whales launch buying spree?
Maker holds steadily above $1,250 support as a whale scoops $1.21 million worth of MKR. Addresses with a 100k to 1 million MKR balance now account for 24.27% of Maker’s total supply. Maker battles a bear flag pattern as bulls gather for an epic weekend move.
Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.