- NZD/USD moves in an upward direction amid a subdued US Dollar.
- The improved US balance sheet gives rise to US bond prices, undermining the US Dollar.
- The expected Chinese stimulus could boost the New Zealand Dollar.
NZD/USD inches higher for another session, trading around 0.6140 during the early European hours on Tuesday. The US Dollar (USD) has faced a challenge on downbeat US Treasury yields. The release of an improved US balance sheet has supported US Treasury bond prices, which, in turn, puts downward pressure on the Greenback.
The US Dollar Index (DXY) holds ground around 103.50 with the 2-year and 10-year yields on US Treasury notes standing lower at 4.29% and 4.03%, respectively, by the press time. Moreover, there is a prevailing market risk spurs on escalated tension in the Middle East.
Tuesday's releases of the Housing Price Index and Consumer Confidence figures will be under scrutiny by market observers, aiming to glean additional insights into the US economic landscape.
The prevailing expectation among most economists is for the first rate cut to occur in May or June, though the possibility of a cut at the Federal Reserve's March meeting is not ruled out. Meanwhile, the anticipated Federal Open Market Committee (FOMC) statement on Wednesday, January 31 is expected to yield no adjustment.
The New Zealand Dollar (NZD) seems to have received a boost with the People's Bank of China (PBoC) considering a possible reduction in the Medium-term Lending Facility (MLF) rate. Meanwhile, Reserve Bank of New Zealand (RBNZ) Chief Economist Paul Conway remarked on Tuesday that recent economic data indicates the effectiveness of monetary policy, but there remains a journey ahead before inflation reaches its target midpoint of 2.0%.
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 retreats from tops post-US PCE, back near 1.0540
The bearish sentiment in the US Dollar remains in place and supports EUR/USD's constructive outlook, keeping it in the 1.0540 region after the release of US inflation data, as measured by the PCE, on Wednesday.
GBP/USD recedes to 1.2640 on US PCE data
GBP/USD remains positively oriented in the 1.2640 zone as the Greenback experiences a marked pullback following the PCE inflation release.
Gold eases from daily highs as bears seize control
Gold remains on the positive foot near $2,640 per troy ounce, as US inflation data matched initial estimates in October, while US yields display a negative performance across the curve.
The clock is ticking for France
A French political problem is turning into a problem for financial markets. The budget deficit in France is 6% of GDP, if the planned reforms are not enacted, then the deficit could rise to 7% of GDP next year. This is the level when bond vigilantes start to sniff around.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.