The New Zealand dollar has fallen against the US dollar for the sixth day in a row. The gloomy global economic forecast is having an impact on NZD/USD. The Asian spot price dropped to 0.5890 on Monday.
Since New Zealand is a commodity exporter, the weakening of the NZD/USD was a direct result of inflation data released by the Reserve Bank of New Zealand (RBNZ). As the economic climate worsens and consumer demand drops, the survey shows that many people are anticipating price cuts. A shift in the economy appears to be the result of anticipation.
The Services Index for Business NZ dropped from 50.7 in September to 48.9 in October, according to their Purchasing Managers’ Index. The New Zealand dollar (NZD) may come under additional stress as a result of this news.
Chinese inflation decreased yearly in October, which could damage global economy. The New Zealand Dollar (NZD) is impacted because New Zealand is a major supplier of commodities to China.
Investors look forward to the presidential meeting between the United States and China. This Wednesday at the Asia-Pacific Economic Cooperation summit in San Francisco will be the first time in a year that President Biden and President Xi will meet face to face. Russia’s invasion of Ukraine, the production of fentanyl, and artificial intelligence are just some of the many topics on the extensive agenda.
DXY offers in the region of 105.80 despite rising US Treasury yields. At this writing, the yield on 10-year US bonds has increased by 0.17%, to 4.66 percent.
The recent hawkish statements made by Fed Chair Jerome Powell were not good for the Greenback. Powell expressed concern that current efforts may not be sufficient to achieve a 2.0% inflation rate.
The preliminary US Michigan Consumer Sentiment statistics will put the US dollar to the test on Friday. According to the data, consumer sentiment took a dive in November, falling from 63.8 to 60.4.
Traders will be keeping an eye on Tuesday’s release of the US Consumer Price Index (CPI). The PPI-Output reading later this week will be good news for Kiwis. On Wednesday, keep an eye on China’s Industrial Production and Retail Sales.
Trade Idea:
Consider short-term sell positions on NZD/USD, pending CPI & PPI reports and China’s economic data. Monitor US-China talks’ impact on market sentiment.