Nzdusd Declines To Month Low

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Nzdusd Declines To Month Low

Nzd/Usd Declines To 3-Month Lows

NZD/USD continues its decline for the 3rd day in a row and is seen near 0.5870. Right now, NZD/USD is delving at its 3-month low during Thursday's session.

key reason behind the downside of NZD/USD is due to the stronger US Dollar. At the same time, the Fed officials' comments were less dovish after the release of the US CPI.

Dxy Hovers Near 106.60

If we look at the DXY (US Dollar Index), it is trading near 106.60, which is the highest level since November 2023. Additionally, the bond yields are rising, with the 2Y at 4.31% and 10Y at 4.47%.

Recently, Fed Musalem talked about how inflation levels are making it difficult for the Fed to keep lowering its rates. According to him, the US labor market is still very robust, which means the Fed can do more to counter inflation. Also, Fed Schmid talked about the rate cuts and how the Federal Reserve is facing hurdles for it.

The US CPI was released which showed a reading of 2.6% y/y in October. Although the inflation has gone up, it was still in line with the forecasts, which is no surprise here.

Looking ahead, the RBNZ is expected to lower the rate by 75 bps in November. This is likely to happen as the inflation is now at multi-year lows. Even if the 75 bps is not delivered, the chances of 50 bps are also high.

look at New Zealand's Food Price Index shows a reading of 1.2% y/y during October. That's the highest level only seen during February 2024.

Now, the traders are waiting for the release of the US PPI, which is due later today. Additionally, the Retail Sales and Industrial production will also be closely watched by the NZD/USD traders.

Meanwhile, the Chinese data is also due in the next few days which is also important for the NZD/USD pair.

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