Ella 
NZD/USD continues to follow the downward trajectory started on October 17, trading lower around 0.5820 during the European session on Monday. The pair moved lower as the dollar rebounded, driven by rising U.S. Treasury yields. In addition, rising risk aversion due to the Israel-Hamas military situation also contributed to the decline of NZD/USD.
US Federal Reserve (Fed) officials expressed mixed opinions on the trajectory of interest rates, which could limit losses in the NZD/USD pair. Atlanta Fed President Raphael Bostic said the Fed is unlikely to cut interest rates before the middle of next year, while Philadelphia Fed President Patrick Harker expressed a preference for keeping rates on hold.
In addition, Federal Reserve (FED) Chairman Jerome Powell clarified last week that the central bank does not plan to raise interest rates immediately, emphasizing the possibility of further tightening monetary policy based on signs of economic growth.
The U.S. Dollar Index (DXY) has pared intraday gains and is trading lower near 106.10 at the time of writing. However, the dollar found upside support due to positive momentum in U.S. Treasury yields, with the 10-year U.S. Treasury yield at 4.97% at press time, up 1.22%.
On Friday, New Zealand’s trade balance data showed very similar figures to last month. The trade balance posted a $2.329 billion deficit in September, slightly higher than the $2.273 billion deficit in August.
The previous week, the overall consumer price index (CPI) rose 1.8% in the third quarter, missing expectations of 2.0%. Annual growth fell to 5.6% from 6.0%, missing consensus estimates of 5.9%. The data prompted investors to adjust their expectations for a rate hike by the Reserve Bank of New Zealand (RBNZ) in November, putting downward pressure on NZD/USD.
China plans to hold its twice-in-a-decade financial policy meeting next week. The meeting will discuss risk prevention issues including the Local Government Financing Vehicle (LGFV). China plans to hold a major financial policy meeting once every five years early next week to guard against risks and set medium-term priorities for the $61 trillion industry, according to people familiar with the matter.
Investors are likely to focus on Tuesday’s U.S. S&P Global Purchasing Managers’ Index and Thursday’s third-quarter gross domestic product (GDP). In the NZD, consumer confidence will be on focus on Friday.
