NZD/USD trades lower near 0.6030 after pulling back from a three-month high
|- NZD/USD retreats from the three-month high at 0.6086.
- US Dollar gains ground on improved US bond yields.
- Fed is open to tightening policy further if the inflation target fails to be met.
- The positive China’s outlook supports the rise in the New Zealand Dollar.
NZD/USD snaps a three-day winning streak after retreating from the three-month high at 0.6086, which could be attributed to the increase in the US Dollar (USD). The NZD/USD pair trades lower near 0.6030 during the early European session on Wednesday.
The Greenback experiences strength as US Treasury yields improve. The 10-year and 2-year US bond yields hold at 4.41% and 4.88%, respectively, at the time of writing. The US Dollar Index (DXY) edges higher around 103.70.
The Federal Open Market Committee (FOMC) revealed a modestly hawkish tone in the meeting minutes on Tuesday, which might have provided some upward support for the buck. The FOMC committee members expressed the possibility of further tightening of monetary policy in the event that fresh data fail to demonstrate the Federal Reserve's (Fed) goal of inflation. The Board also decided that policy ought to stay tight for a little while longer, or until inflation is manifestly and steadily declining in the direction of the Committee's goal.
On Tuesday, New Zealand's Trade Balance was $-14.81 billion YoY in October against the $-15.41 billion in September. In the meantime, the country's imports fell to $7.11 billion from $7.20 billion in previous readings, while exports increased to $5.40 billion from $4.77 billion.
Furthermore, the positive outlook for China, its main trading neighbor, is supporting the rise in the New Zealand Dollar (NZD). A representative of the People's Bank of China (PBOC) reiterated their resolve to offer the nation's faltering real estate industry additional policy support.
Investors will likely observe the data from the United States (US) on Wednesday, which includes weekly jobless claims and the Michigan Consumer Sentiment survey. On Kiwi’s docket, Retail Sales for the third quarter is expected to show an improvement on Friday’s release.
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.