US Dollar gains resilience over Kiwi strength. During the Asian session on Tuesday, Kiwi dropped to 0.5960, marking its second consecutive session of losses. In contrast, the US Dollar Index (DXY) has rebounded to approximately 105.40 from a two-month low. This recovery is driven by improved US Treasury yields, which have bolstered the greenback.
For weeks, the NZDUSD market has been fueled by a serious surge due to reports that the Fed could put a hold on tightening policies. However, their rally was short-lived as the Kiwis faced unimpressed labor data. The employment change rate drastically declines, and the reverse is true for the unemployment rate. This has given rise to speculation that the RBNZ (Reserve Bank of New Zealand) could tend to raise its interest rate in December.
Positive Outlook Could Trigger A Rebound
Investors are keeping a serious tab on China’s trade balance and the kiwi inflation forecast for the fourth quarter. This report is expected for the week as trade goes by. The outcome of these data releases will significantly impact Kiwi this week. A positive outlook for the New Zealand economy could trigger a rebound, while weak data might further weaken the NZDUSD.
The fate of the NZDUSD depends on both the market vigor of the US Dollar and Kiwi economic data. If the US dollar remains robust and Kiwi data stays weak, the pair could continue to fall. However, a positive surprise from either side could offer some resilience to the currency pair.
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