Early on Tuesday, the NZD/USD bulls are close to 0.6300. The US dollar is getting weaker overall, which is good news for the kiwi pair. But recent weak statistics from China and the holiday spirit test bulls.

But China’s Industrial Profits fell 3.6% from January to November, up from a drop of 3%. Geopolitical worries from Russia and North Korea also make it hard for Kiwi pair buyers at the end of the year when the market is quiet.
After getting rid of the COVID quarantine requirement for tourists coming in on January 8, people are still willing to take risks.

The US dollar is also hurt by lower inflation and output numbers, which make it hard to predict what the Fed will do next. The US Dollar Index (DXY) goes down for a third day. At press time, it was down 0.13 percent, or near 104.05.

The Fed’s preferred measure of inflation, the US Core Personal Consumption Expenditures (PCE) Price Index, matched expectations for November at 4.7% YoY, down from 5.0%. Durable Goods Orders for the month fell 2.1%, which was worse than the -0.6% drop that was expected and the 0.7% drop that happened the month before.

Importantly, Nondefense Capital Goods Orders excluding Aircraft went up by 0.2%, even though 0.0% was expected and 0.3% was taken away. The Fed Bank of Atlanta’s GDPNow tracker showed that growth was +3.7% on an annualised basis for Q4, up from +2.7% in Q3.

During the day, S&P 500 Futures go up by 0.75 percent to 3,898, while 10-year Treasury yields go down to 3.73%.

Conclusion

During a week with no big news or events, the NZD/USD pair could be helped by optimism about China and a negative outlook from the Fed.