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NZD/USD pared its intraday gains and was still trading higher around 0.6160 during the Asian session on Friday. NZD/USD found upside support as the U.S. dollar (USD) moved lower amid low U.S. bond yields. In addition, the Roy Morgan Consumer Confidence Index for New Zealand released by ANZ in November showed that the consumer confidence index rose to 91.9 from the previous 88.1. Improving data may support NZD strength.
In addition, slightly hawkish comments from Reserve Bank of New Zealand (RBNZ) Deputy Governor Christian Hawkesby may also provide support for the New Zealand dollar. “Core inflation remains high and there is little room for error,” Hawkesby said on Friday. Deputy Governor Hawkesby was also concerned that some measures of inflation expectations have risen. New Zealand may be recovering from Benefiting from a period of restrained spending, most borrowers are able to manage their debt at current interest rates.
China’s Caixin Manufacturing Purchasing Managers’ Index (PMI) exceeded expectations in November, rising to 50.7, shattering expectations for a decline from 49.5 to 49.8. Given the economic dynamics between China and New Zealand, this unexpectedly positive data has the potential to provide support for the kiwi dollar and allow it to strengthen.
The U.S. Dollar Index (DXY) faces challenges as muted reaction in U.S. bond yields offsets recent gains. Mixed U.S. data could help the dollar strengthen. The U.S. core personal consumption expenditures price index (PCE) slowed to a monthly rate of 3.5% in October, down from the previous reading of 3.7%. On the labor market front, initial jobless claims for the week ended Nov. 24 came in at 218,000, slightly below expectations of 220,000. These indicators provide insights into inflation trends and labor market health, influencing economic assessments and potential policy decisions.
