CFD Trading Rate New Zealand Dollar vs US Dollar (NZDUSD)

• NZD/USD gains ground to near 0.5875 in Thursday’s early Asian session.
• Fed’s Bowman said inflation is still elevated and has moved sideways in the last few months, so the Fed needs to be cautious.
• The RBNZ is anticipated to cut its interest rate next week. 

The NZD/USD pair posts modest gains to around 0.5875 during the early Asian session on Thursday. However, the upside for the pair might be limited as investors await Fedspeak for more cues about the Federal Reserve's interest rate outlook and US President-elect Donald Trump's proposed policies.

The US Dollar index (DXY), which measures the greenback against a basket of currencies, currently trades near 106.60 after retracing from a yearly high of 107.06 last week. The growing bets that the Fed may slow its path of interest-rate cuts on concerns Trump's policies could reignite inflation boost the US Dollar (USD) against the Kiwi. 

Economists expect the Fed to cut rates at its December meeting with shallower cuts in 2025 than expected a month ago due to the risk of higher inflation from Trump's policies, according to a Reuters poll. 

Federal Reserve Board of Governors member Michelle Bowman said on Wednesday that inflation is still elevated and moving sideways in the last few months and the US central bank should pursue a cautious approach to monetary policy.

On the Kiwi front, the growing expectations that the Reserve Bank of New Zealand (RBNZ) would cut its Official Cash Rate (OCR) next week might weigh on the New Zealand Dollar (NZD). Markets are fully pricing in a 50 bps reduction, with 12% odds of a larger 75 bps rate cut. ANZ chief economist Sharon Zollner expects the RBNZ to cut its OCR by 50 basis points (bps) next week, bringing the rate to 4.25%. “If there is going to be a surprise, a larger cut seems likelier than a smaller one,” added Zollner.  

Upward momentum is building, albeit tentatively. The New Zealand Dollar (NZD) is likely to edge higher, but is unlikely to reach 0.5960 for now. In the longer run, provided that NZD remains above 0.5850, it could rise gradually to 0.5960, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

NZD can rise gradually to 0.5960

24-HOUR VIEW: “Yesterday, we expected NZD to trade in a 0.5860/0.5910 range. It then traded between 0.5876 and 0.5913, closing on a firm note at 0.5911, higher by 0.29% for the day. Upward momentum appears to be building, albeit tentatively. Today, NZD is likely to edge higher. As momentum is not strong, any advance is unlikely to reach 0.5960 for now (there is another resistance level at 0.5940). Support is at 0.5895; a breach of 0.5875 would mean that the buildup in momentum has eased.”

1-3 WEEKS VIEW: “After holding a negative view in NZD since the middle of last week, we highlighted yesterday that ‘slowdown in momentum indicates that 0.5775 is probably out of reach.’ In NY trade, NZD rose to 0.5913. Downward momentum has faded. Upward momentum is beginning to build. From here, provided that NZD remains above 0.5850, it could rise gradually to 0.5960.”

• NZD/USD depreciates toward throwback support at 0.5850 level within the descending channel pattern.
• The daily chart analysis indicates an increasing bearish bias, with the pair moving downwards within the descending channel pattern.
• Immediate resistance is found at the nine-day EMA of 0.5907, with the next level at the 14-day EMA of 0.5926.

The NZD/USD pair breaks its three-day winning streak, trading around 0.5890 during the European session on Wednesday. A review of the daily chart highlights a growing bearish bias, as the pair moves downwards within the descending channel pattern.

The nine-day Exponential Moving Average (EMA) remains below the 14-day EMA, signaling persistent weakness in short-term price momentum. Meanwhile, the 14-day Relative Strength Index (RSI) consolidates below 50 level, confirming the ongoing bearish sentiment.

Regarding the support, the NZD/USD pair could navigate the region around the “throwback support” at the psychological level of 0.5850, followed by the lower boundary of the descending channel at 0.5930 level.

A decisive break below this channel would reinforce the bearish outlook, increasing downward pressure and potentially driving the Kiwi pair toward its two-year low of 0.5772, last seen in November 2023.

On the upside, immediate resistance lies at the nine-day EMA at 0.5907, followed by the 14-day EMA at 0.5926, which coincides with the upper boundary of the descending channel. A breakout above this channel would weaken the bearish momentum, paving the way for the NZD/USD pair to target the psychological level of 0.6000.

NZD/USD: Daily Chart

• NZD/USD edges lower to around 0.5910 in Wednesday’s Asian session. 
• The RBNZ is anticipated to cut its OCR by 50 bps next week.
• Geopolitical risks could boost the USD and create a headwind for NZD/USD. 

The NZD/USD pair trades in negative territory near 0.5910 during the Asian session on Wednesday. The rising expectations of interest rate cut by the Reserve Bank of New Zealand (RBNZ) next week and geopolitical risks weigh on the riskier asset like the Kiwi.  

ANZ chief economist Sharon Zollner expects the RBNZ to cut its Official Cash Rate (OCR) by 50 basis points (bps) next week, bringing the rate to 4.25%. “If there is going to be a surprise, a larger cut seems likelier than a smaller one,” added Zollner. Markets are fully pricing in a 50 bps reduction, with 12% odds of a larger 75 bps rate cut. The rising bets of the RBNZ are likely to weigh on the Kiwi in the near term. 

Elsewhere, the People’s Bank of China (PBOC) announced to leave its Loan Prime Rates (LPRs) unchanged on Wednesday. The one-year and five-year LPRs were at 3.10% and 3.60%, respectively. 

On the other hand, analysts expect incoming US President Donald Trump's policies could reignite inflation and might slow the path of interest rate cuts. This, in turn, could lift the USD against the New Zealand Dollar (NZD). Markets have pared bets for a 25 basis points (bps) interest-rate cut at the December meeting to less than 59%, down from 76.8% a month ago, according to the CME FedWatch Tool.

Additionally, Ukraine used US ATACMS missiles to strike Russian territory for the first time, Moscow said. Meanwhile, Russian President Vladimir Putin lowered the threshold for a possible nuclear strike, per Reuters. The rising geopolitical risks between Russia and Ukraine could boost the safe-haven demand, supporting the Greenback. 

• NZD/USD gained further ground around 0.5900.
• Buyers gained further ground and pushed back the sellers’ attempts as indicators continue in recovery mode.
• The pair might continue to gain ground as it moves closer to its 20-day SMA at 0.5960.

The NZD/USD climbed by 0.31% to 0.5910 in Tuesday's session, continuing its recovery as buyers gained further ground and pushed back the sellers' attempts. Indicators such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) continue to recover, signaling a mixed momentum.

From a technical perspective, the NZD/USD's outlook is mixed with signs of a bullish recovery. The RSI's rise to 43 with its sharp upward slope suggests increasing buying pressure in the negative area and a potential recovery in bullish momentum. Additionally, the MACD's decreasing red histogram indicates a loss of bearish momentum. These mixed signals suggest a potential shift in market sentiment from bearish to bullish.

The NZD/USD pair's recovery continues as buyers regain control and push back sellers. The pair seems to be on its way towards the the 20-day Simple Moving Average (SMA) at 0.5960. As the pair trades near key resistance levels, a breakout above this level could strengthen bullish momentum, while a drop below 0.5900 could indicate a bearish reversal.

NZD/USD daily chart

The New Zealand Dollar (NZD) is likely to trade in a 0.5860/0.5910 range. In the longer run, slowdown in downward momentum indicates that 0.5775 is probably out of reach, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

NZD is likely to trade in a 0.5860/0.5910 range

24-HOUR VIEW: “Yesterday, we expected NZD to trade in a range between 0.5845 and 0.5885. NZD subsequently dipped to 0.5838 before rising strongly to 0.5898. Despite the advance, there has been no significant increase in momentum, and NZD is unlikely to advance much further. Today, NZD is more likely to trade in a 0.5860/0.5910 range.”

1-3 WEEKS VIEW: “We turned negative in NZD last Wednesday (13 Nov, spot at 0.5925), but we indicated that ‘it is too early to tell if the major support at 0.5850 is within reach.’ After NZD fell below 0.5850, we indicated last Friday (15 Nov, spot at 0.5845) that ‘the outlook for NZD remains negative, and the technical target now is at last year’s low of 0.5775.’ Yesterday, NZD rebounded to 0.5898. While our ‘strong resistance’ level at 0.5915 has not been breached yet, the slowdown in downward momentum indicates that 0.5775 is probably out of reach.”

• NZD/USD may face challenges as traders expect the RBNZ to deliver a substantial rate cut next week.
• The US Dollar gains ground due to dampened odds of an imminent Fed rate cut.
• Fed’s Powell stated, "The economy is not sending any signals that we need to be in a hurry to lower rates."

The NZD/USD pair trades near 0.5890 during the early European session on Tuesday, maintaining its stance amid a softer US Dollar (USD) as profit-taking tempers its recent gains. However, the pair’s upside remains capped due to growing expectations of a bumper interest rate cut by the Reserve Bank of New Zealand (RBNZ) next week.

Meanwhile, traders are keeping a close watch on the upcoming Loan Prime Rate (LPR) decision from China, a key trading partner of New Zealand. Market participants anticipate potential additional stimulus measures to bolster economic growth, following the recent 10 trillion Yuan debt package that lacked direct economic stimulus, further intensifying market concerns.

The US Dollar (USD) may appreciate as the Federal Reserve (Fed) Chair Jerome Powell tempered expectations for immediate rate cuts. Powell highlighted the economy's resilience, a strong labor market, and persistent inflationary pressures, stating, "The economy is not sending any signals that we need to be in a hurry to lower rates." Investors are now looking for further guidance from Fed officials later this week on the future path of US interest rates.

Moreover, traders anticipate that the incoming Trump administration will prioritize tax cuts and impose higher tariffs. These measures could fuel inflation, potentially slowing the pace of Fed rate cuts and supporting the US Dollar. Traders are now focused on the upcoming October US Building Permits and Housing Starts data, which is set to be released on Tuesday.

• NZD/USD trades with a bearish bias near 0.5890 in Tuesday’s early Asian session. 
• Markets pared expectations of future rate cuts by the US Fed. 
• ANZ analysts forecast a 50 bps rate cut from the RBNZ at its November meeting next week. 

The NZD/USD pair trades with mild losses around 0.5890 during the early Asian session on Tuesday. The pair edges lower amid the consolidation of the Greenback. Later on Tuesday, investors will keep an eye on the US Building Permits and Housing Starts for October. 

The US Dollar Index (DXY), which measures the USD against a basket of currencies, retraces from a one-year high above 107.00 to near 106.20. However, the downside of the Greenback might be capped as investors expect that the incoming Trump administration would focus on lowering taxes and raising tariffs, which could stoke inflation and slow the path of rate cuts from the Federal Reserve (Fed). 

Boston Fed president Susan Collins said on Friday that rate reductions could be paused as soon as the December meeting, but it depends on upcoming data on jobs and inflation. According to the CME FedWatch Tool, the markets have priced in nearly 58.7% of the 25 basis points (bps) rate cut by the Fed at the December meeting. 

On the Kiwi front, the rising expectation of jumbo interest rate cuts by the Reserve Bank of New Zealand (RBNZ) next week weighs on the New Zealand Dollar (NZD). ANZ analysts forecast a 50 basis points (bps) reduction from the RBNZ on November 27. “We expect a 50bp cut to 4.25% next week. That would be consistent with RBNZ's October messaging, economists’ forecasts, and market pricing. Data since the October Monetary Policy Review has been mixed, but no data looks likely to upset the apple cart,” noted ANZ analysts. 

• NZD/USD is expected to see more weakness as the US Dollar holds onto gains.
• Interest rate cuts from the Fed are expected to be slower and shallow.
• NZ Q3 producer inflation unexpectedly accelerated for both inputs and outputs.

The NZD/USD pair struggles to hold the immediate support of 0.5850 in the North American trading session on Monday. The Kiwi pair sees more downside as the US Dollar (USD) performs strongly across the board on expectations that the economic agenda of President-elected Donald Trump will boost inflationary pressures and spurt the overall growth.

Historically, the Federal Reserve (Fed) tends to slowdown its policy-easing cycle in a high-inflation environment.

Meanwhile, Fed Chair Jerome Powell also delivered slightly hawkish remarks in his speech at Federal Bank of Dallas event on Thursday. Jerome Powell said that the economy is not sending any signals that should compel the Fed to cut interest rates aggressively. However, he reiterated that the disinflation trend towards the bank’s target of 2% is intact and is allowing the central bank to push Federal Funds rate towards the neutral setting.

Powell refrained from providing any economic projections for the period when Trump will administer the office. Powell said, "I think it's too early to reach judgments here." He added, "We don't really know what policies will be put in place."

In the New Zealand region, the Producer Price Index (PPI) grew faster-than-expected in the third quarter of the year but failed to dent market expectations for more larger-than-usual interest rate cuts by the Reserve Bank of New Zealand (RBNZ). The PPI for output surprisingly accelerated to 1.5% from 1.1% in the second quarter of the year. Economists expected the producer inflation to have grown at a slower pace of 0.9%.

The RBNZ reduced its Official Cash Rate (OCR) by 50 basis points (bps) to 4.75% last month and is expected to do the same in its monetary policy meeting on November 27.

The New Zealand Dollar (NZD) is expected to trade in a range between 0.5845 and 0.5885. In the longer run, outlook for NZD remains negative; the technical target now is at last year’s low of 0.5775, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Outlook for NZD remains negative

24-HOUR VIEW: “We expected NZD ‘to continue to weaken’ last Friday. However, it traded in a 0.5841/0.5880 range. The price movements are likely part of a range trading phase. Today, NZD is expected to trade between 0.5845 and 0.5885.”

1-3 WEEKS VIEW: “We turned negative in NZD last Wednesday (13 Nov, spot at 0.5925), but we indicated that ‘it is too early to tell if the major support at 0.5850 is within reach.’ After NZD fell below 0.5850, we indicated last Friday (15 Nov, spot at 0.5845) that ‘the outlook for NZD remains negative, and the technical target now is at last year’s low of 0.5775.’ We will continue to hold the same view, provided that 0.5915 (‘strong resistance’ previously at 0.5925) is not breached.”

• NZD/USD may depreciate further as daily chart analysis indicates a strengthening bearish bias.
• The pair attempts to break below the lower boundary of the descending channel at the 0.5850 level.
• The immediate resistance appears at the nine-day EMA at 0.5901, followed by the 14-day EMA at 0.5928.

The NZD/USD pair retraces its recent gains, trading around 0.5850 during the European hours on Monday. A review of the daily chart highlights a growing bearish bias, as the pair tests the lower boundary of its descending channel pattern.

The nine-day Exponential Moving Average (EMA) remains below the 14-day EMA, signaling persistent weakness in short-term price momentum. Meanwhile, the 14-day Relative Strength Index (RSI) hovers around the 30 level, indicating oversold conditions for the NZD/USD pair and hinting at the possibility of an upward correction.

Regarding the support, the NZD/USD pair is testing the lower boundary of the descending channel, which aligns with the throwback support at the psychological level of 0.5850. A decisive break below this channel would reinforce the bearish outlook, increasing downward pressure and potentially driving the pair toward its two-year low of 0.5772, last seen in November 2023. 

On the upside, immediate resistance lies at the nine-day EMA at 0.5901, followed by the 14-day EMA at 0.5928, which coincides with the upper boundary of the descending channel. A breakout above this channel would enhance bullish momentum, paving the way for the NZD/USD pair to target the psychological level of 0.6100.

NZD/USD: Daily Chart

• NZD/USD gains ground to around 0.5875 in Monday’s early Asian session. 
• New Zealand’s PPI Input and Output were stronger than expected in Q3;  Business NZ PSI improved in October. 
• Strong US data and muted expectations for US rate cuts might cap the pair’s upside. 

The NZD/USD pair trades in positive territory near 0.5875 on Monday during the early Asian session. The pair edges higher on the stronger-than-expected New Zealand economic data and the consolidation of the Greenback. 

Data released by Statistics New Zealand on Monday showed that New Zealand’s Producer Price Index (PPI) Input climbed 1.9% QoQ in the third quarter (Q3), compared to 1.4% in the previous reading. Meanwhile, the PPI Output rose 1.5% QoQ in Q3 versus 1.1% prior. Both figures came in better than the estimations. Additionally, the Business NZ Performance of Services Index (PSI) improved to 46.0 in October from 45.7 in September. The upbeat economic data provides some support to the New Zealand Dollar (NZD) against the US Dollar (USD). 

However, the upside for the Kiwi might be limited as President-elect Donald Trump has threatened to implement 60% tariffs on exports from China as he seeks to protect US companies and jobs. The likely negative spillovers from Trump’s policies might drag the NZD lower as China is a major trading partner for New Zealand. 

On the USD’s front, the solid economic performance and the cautious tones from the US Federal Reserve (Fed) reduced the expectations for a rate reduction at the central bank's upcoming FOMC meeting in December, lifting the USD. Futures markets hint at 60% odds of a Fed rate cut in December, though expectations for rate cuts through 2025 have moderated to 77 basis points (bps).

• NZD/USD pair traded volatile during Friday's session, clearing all of its daily gains.
• Pair initially soared to a high around 0.5970 near the 20-day SMA before erasing all the gains towards 0.5850.
• The RSI signaled that buying pressure recovered as it neared the oversold area with a rise in slope.

The NZD/USD saw a volatile session on Friday, initially soaring to a high around 0.5970 near the 20-day Simple Moving Average (SMA) before erasing all the gains towards 0.5850. The pair mildly rose to 0.5855, indicating that the bulls have limited power and that the bears continue in command but a correction is on the horizon as indicators are near oversold levels.

The technical indicators currently depict a mixed outlook for the NZD/USD pair. The Relative Strength Index (RSI) suggests that buying pressure is recovering as it is approaching the oversold area and its slope is rising sharply. Conversely, the Moving Average Convergence Divergence (MACD) indicates that selling pressure is flat, as evidenced by the flat and red histogram. Despite these conflicting signals, the overall outlook remains tilted in favor of the bears.

Support levels can be found at 0.5900, 0.5850, and 0.5800, while resistance levels lie at 0.5950, 0.6000, and 0.6050.

NZD/USD daily chart

The New Zealand Dollar (NZD) is expected to continue to weaken; given the deeply oversold conditions, it remains to be seen if 0.5815 will come into view. In the longer run, outlook for NZD remains negative; the technical target now is at last year’s low of 0.5775, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

NZD is expected to continue to weaken

24-HOUR VIEW: “After NZD fell and exceeded our expectations two days ago, we indicated yesterday that ‘Further weakness appears likely today, but oversold conditions suggest any decline may not reach the major support at 0.5850.’ The anticipated weakness once again exceeded our expectations, as NZD fell to a low of 0.5840. Although we continue to expect NZD to weaken today, given the deeply oversold conditions, it remains to be seen if the next support at 0.5815 will come into view. To keep the momentum going, NZD must remain below 0.5885, with minor resistance at 0.5865.”

1-3 WEEKS VIEW: “When we revised our NZD view from neutral to negative two days ago (13 Nov, spot at 0.5925), we indicated that ‘it is too early to tell if the major support at 0.5850 is within reach.’ Following the decline in NZD, we highlighted yesterday (14 Nov, spot at 0.5885) that ‘The increase in momentum indicates that the likelihood of NZD dropping to 0.5850 has also increased.’ In NY trade, NY dropped to 0.5840. Our negative outlook for NZD remains unchanged; the technical target is now at last year’s low of 0.5775. To maintain the buildup in momentum, NZD must remain below the ‘strong resistance’ at 0.5925 (level was at 0.5955 yesterday).”

• NZD/USD remains stable following the release of mixed economic data from China.
• Business NZ PMI fell to 45.8 in October, down from a revised 47.0 in September.
• The US Dollar remains steady near its fresh 2024 highs, despite signs of slowing in "Trump trades."

The NZD/USD halts its three-day losing streak, trading around 0.5850 during the Asian session on Friday. The New Zealand Dollar (NZD) might have received downward pressure as the Business NZ Performance of Manufacturing Index (PMI) fell to 45.8 in October, down from a revised 47.0 in September, reaching its lowest level since July 2024.

The NZD/USD pair holds gains after mixed key data was released from its close trading partner China. Retail Sales rose 4.8% year-over-year in October, surpassing the expected 3.8% and the 3.2% increase seen in September. Meanwhile, the country’s Industrial Production grew by 5.3% YoY, slightly below the forecasted 5.6% but higher than the 5.4% growth recorded in the previous period.

During its press conference on Friday, the National Bureau of Statistics (NBS) shared its economic outlook, noting an improvement in China's consumer expectations in October. The bureau plans to intensify policy adjustments and boost domestic demand, highlighting that recent policies have had a positive impact on the economy.

The US Dollar (USD) remains stable near its fresh 2024 highs, despite indications of slowing in "Trump trades." The US Dollar Index (DXY), which measures the dollar's performance against six major currencies, hovers around 107.00, near its highest level since November 2023.

Market attention is now shifting to the release of US October Retail Sales data on Friday, along with remarks from Federal Reserve officials. On Thursday, Fed Chair Jerome Powell commented that the recent performance of the US economy has been "remarkably good," providing the Fed with the flexibility to gradually lower interest rates.

• NZD/USD declines 0.65% during Thursday's session.
• The pair resumed downturn and printed fresh multi-month lows as bears extended the control.
• The NZD/USD RSI slipped into oversold territory after falling below 30, indicating rising selling pressure.

The NZD/USD pair declined by 0.65% during Thursday's session and fell below the 0.5900 mark, extending declines for the sixth day and hitting lows since November 2023. The bearish momentum escalated and oversold signals emerged.

The NZD/USD pair's bearish sentiment is reinforced by technical indicators. The Relative Strength Index (RSI) has slipped below 30, indicating oversold territory and rising selling pressure. The declining slope of the RSI suggests that this pressure is intensifying. Furthermore, the Moving Average Convergence Divergence (MACD) remains bearish, with the histogram declining and red. These indicators align with the price action, confirming the pair's downward trajectory.

Support levels are at 0.5830, 0.5810, and 0.5800, while resistance levels are at 0.5900, 0.5950, and 0.5970. Traders should monitors these levels in case the oversold nature of the movements push the pair into a consolidation mode.

NZD/USD daily chart

Further New Zealand Dollar (NZD) weakness appears likely; any decline may not reach the major support at 0.5850. In the longer run, likelihood of NZD dropping to 0.5850 has increased, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

NZD weakness appears likely

24-HOUR VIEW: “Yesterday, when NZD was at 0.5925, we held the view that NZD ‘is likely to trade with a downward bias towards 0.5900.’ We were also of the view that ‘a sustained break below 0.5900 is unlikely.’ The anticipated weakness exceeded our expectations, as NZD dropped to a low of 0.5876, closing at 0.5882 (-0.76%). Further weakness appears likely today, but oversold conditions suggest any decline may not reach the major support at 0.5850 (there is another support at 0.5865). On the upside, a breach of 0.5920 (minor resistance is at 0.5905) would mean that NZD is not weakening further.”

1-3 WEEKS VIEW: “We revised our view from neutral to negative yesterday (13 Nov, spot at 0.5925), indicating that ‘Despite the slight increase in momentum, the risk for NZD appears to have shifted to the downside.’ However, we noted that ‘it is too early to tell if the major support at 0.5850 is within reach.’ NZD subsequently dropped to 0.5876. The increase in momentum indicates that the likelihood of NZD dropping to 0.5850 has also increased. To maintain the buildup in momentum, NZD must remain below the ‘strong resistance’ at 0.5955 (level was at 0.5975 yesterday).”

• NZD/USD drops to over a three-month low as the USD buying remains unabated.
• The Trump trade optimism and elevated US bond yields lift the USD to the YTD top.
• Bets for aggressive RBNZ rate cuts and a potential US-China trade war weigh on Kiwi.

The NZD/USD pair prolongs its recent downward trajectory witnessed over the past week or so and drops to its lowest level since August 5, closer to mid-0.5800s on Thursday. Spot prices, however, rebound a few pips during the first half of the European session, though any meaningful recovery still seems elusive in the wake of broad-based US Dollar (USD) strength. 

Investors remain hopeful that US President-elect Donald Trump's policies will boost economic growth and the proposed plan to hike tariffs on imports could accelerate inflation. This, in turn, might force the Federal Reserve (Fed) to pause its easing cycle. Moreover, the US Consumer Price Index (CPI) released on Wednesday pointed to a slower progress toward bringing inflation down and could result in fewer rate cuts next year. This remains supportive of elevated US Treasury bond yields and lifts the USD to a fresh year-to-date (YTD) peak. 

The New Zealand Dollar (NZD), on the other hand, is undermined by rising bets for more aggressive interest rate cuts by the Reserve Bank of New Zealand (RBNZ). This, along with the disappointment over China's fiscal stimulus and looming US-China trade war, weighs on antipodean currencies, including the Kiwi, and contributes to the offered tone surrounding the NZD/USD pair. The downfall could further be attributed to some follow-through technical selling following the overnight sustained break and close below the 0.5900 round-figure mark.

This, in turn, suggests that the path of least resistance for the NZD/USD pair is to the downside and supports prospects for an extension of the recent sharp downfall from the YTD peak touched in September. Hence, any attempted recovery could be seen as a selling opportunity and runs the risk of fizzling out rather quickly. Traders now look to the US economic docket, featuring the usual Weekly Initial Jobless Claims and the Producer Price Index (PPI). This will be followed by Fed Chair Jerome Powell's speech, which should influence the USD.

• NZD/USD loses ground due to "Trump trades" and less dovish comments from Fed officials.
• Fed's Alberto Musalem stated that persistent inflationary pressures force the Fed to halt its rate-cutting strategy.
• RBNZ expects to deliver a bumper 75 basis point rate cut in November as the inflation rate eases.

NZD/USD extends its decline for the third consecutive day, trading near 0.5870, marking a three-month low during Thursday's Asian session. The pair's downward movement is largely due to the strengthening US Dollar (USD), fueled by "Trump trades" and less dovish remarks from Federal Reserve (Fed) officials following US inflation data. 

The US Dollar Index (DXY), which measures the value of the US Dollar against its six major peers, holds steady around 106.60, its highest level since November 2023, supported by rising US Treasury yields. At the time of writing, the 2-year and 10-year US Treasury yields are at 4.31% and 4.47%, respectively.

On Wednesday, St. Louis Fed President Alberto Musalem remarked that ongoing inflationary pressures make it challenging for the Fed to maintain a course of rate cuts. Musalem shifted focus to the robustness of the US labor market, aiming to ease concerns about inflation's resistance to the Fed's efforts to reduce it. Meanwhile, Kansas City Fed President Jeffrey Schmid emphasized the potential hurdles in the path toward lowering interest rates.

The US Consumer Price Index (CPI) rose by 2.6% year-over-year in October, matching market expectations, following a 2.4% increase in the previous month. Meanwhile, the core CPI, which excludes the more volatile food and energy sectors, climbed by 3.3%, in line with forecasts.

The Reserve Bank of New Zealand (RBNZ) is anticipated to announce a more substantial 75 basis point rate cut later this month as the inflation rate eases to its lowest level since Q1 2021 in the third quarter. A 50 basis point cut has already been fully priced in by markets.

However, the Food Price Index in New Zealand remained steady at 1.2% year-over-year in October, marking the highest level since February. On a monthly basis, food prices dropped by 0.9% in October, following a 0.5% increase the previous month.

Traders are now focusing on the upcoming US October Producer Price Index (PPI) data, scheduled for release on Thursday. Market participants are also looking ahead to the release of Industrial Production and Retail Sales data for October from China, New Zealand's largest trading partner, which is due on Friday.