- NZD/USD continues its winning streak on a risk-on-market mood.
- Atlanta Fed President Raphael Bostic expects 50 bps rate cuts by the end of 2024.
- Chinese Zhongzhi’s bankruptcy liquidation might have weighed on the New Zealand Dollar.
- Traders await the Kiwi Building Permits on Thursday to gain fresh cues on New Zealand’s economic landscape.
NZD/USD moves on an upward trajectory, extending gains for the third successive session. The NZD/USD pair trades higher near 0.6260 during the Asian hours on Tuesday. The pair rebounded from a three-week low at 0.6181 on Friday after mixed economic data from the United States (US).
Additionally, the NZD/USD pair appears to be influenced by comments from Federal Reserve (Fed) members, suggesting potential rate cuts by the end of 2024. These remarks triggered a risk-on sentiment and contributed to downward pressure on the US Dollar (USD), consequently leading to an upward movement in the pair.
Atlanta Fed President Raphael W. Bostic's anticipation of two quarter-point cuts by the end of 2024 reflects a cautious approach, considering the decline in inflation more than initially expected. On the other hand, US Fed Governor Michelle W. Bowman's remarks suggest a watchful stance, stating that the current policy stance seems sufficiently restrictive, but acknowledging the possibility of lowering the Fed's policy rate if inflation moves closer to the 2% target.
The US Dollar Index (DXY) seems to extend its losses, trading near 102.10. The downbeat US Treasury yields weigh on the US Dollar with the 2-year and 10-year yields on US Treasury bonds standing lower at 4.37% and 4.02%, respectively, by the press time.
The news from China regarding the bankruptcy liquidation of Zhongzhi Enterprise Group, a major player in the country's shadow banking sector, might have introduced a barrier to the advancement of the New Zealand Dollar (NZD). With significant liabilities amounting to $64 billion, the financial struggles of Zhongzhi Enterprise Group raise concerns about contagion from the broader property debt crisis into the financial sector.
The focus on New Zealand Building Permits, especially ahead of the US Consumer Price Index (CPI) data on Thursday, highlights the potential impact on the NZD/USD pair. Additionally, Friday's Chinese Consumer Price Index (CPI) and Producer Price Index (PPI) figures will likely attract attention, considering the interconnected global economic landscape.
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
AUD/USD appreciates as US Dollar remains subdued after a softer inflation report
The Australian Dollar steadies following two days of gains on Monday as the US Dollar remains subdued following the Personal Consumption Expenditures Price Index data from the United States released on Friday.
USD/JPY consolidates around 156.50 area; bullish bias remains
USD/JPY holds steady around the mid-156.00s at the start of a new week and for now, seems to have stalled a modest pullback from the 158.00 neighborhood, or over a five-month top touched on Friday. Doubts over when the BoJ could hike rates again and a positive risk tone undermine the safe-haven JPY.
Gold downside bias remains intact while below $2,645
Gold price is looking to extend its recovery from monthly lows into a third day on Monday as buyers hold their grip above the $2,600 mark. However, the further upside appears elusive amid a broad US Dollar bounce and a pause in the decline of US Treasury bond yields.
Week ahead: No festive cheer for the markets after hawkish Fed
US and Japanese data in focus as markets wind down for Christmas. Gold and stocks bruised by Fed, but can the US dollar extend its gains? Risk of volatility amid thin trading and Treasury auctions.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
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.