- NZD/USD extends its gains on bullish sentiment despite a stable US Dollar.
- Kiwi Consumer Confidence improved to 93.1 from 91.9 prior.
- Chicago Fed President Austan Goolsbee mentioned that the market's enthusiasm for interest rate trajectory exceeded realistic expectations.
NZD/USD continues its winning streak that began on December 11, edging higher around 0.6280 during the early European session on Wednesday. The improved Kiwi Consumer Confidence data reinforces the strength of the New Zealand Dollar (NZD) against the US Dollar (USD). ANZ – Roy Morgan Consumer Confidence for November rose to 93.1 from the previous figures of 91.9.
Additionally, the Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr expressed surprise at unexpectedly subduing New Zealand's GDP data. However, he refrained from offering a definitive opinion on its implications for the interest rate outlook. Orr noted that there is still a considerable journey ahead, especially considering persistently high inflation levels.
The US Dollar Index (DXY) trades higher around 102.20 despite downbeat US Treasury yields. The 2-year and 10-year yields on US bond coupons tick lower at 4.38% and 3.89%, respectively. The DXY faced downward pressure on a dovish sentiment surrounding the US Federal Reserve (Fed), indicating the potential for rate cuts in early 2024.
In a Wednesday morning interview with Fox TV, Austan Goolsbee, President of the Federal Reserve Bank of Chicago, cautioned that the market's enthusiasm for potential interest rate cuts has exceeded realistic expectations. Goolsbee also noted that if inflation continues to decrease, the Fed may reevaluate the extent of its restrictions.
US Housing Starts outperformed expectations, reaching 1.56 million and surpassing the market consensus set at 1.36 million. However, Building Permits experienced a slight dip, registering at 1.46 million, just below the projected 1.47 million. Investors are anticipated to closely observe the changes in Existing Home Sales and the results of the CB Consumer Confidence survey scheduled for Wednesday.
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