Anna 
NZD/USD continues its winning streak that commenced on December 11, trading higher around 0.6280 in early European trade on Wednesday. The New Zealand dollar (NZD) gained strength against the U.S. dollar (USD) following an improvement in New Zealand consumer confidence data. The ANZ-Roy Morgan consumer confidence index rose to 93.1 in November from the previous 91.9.
Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr expressed surprise at the unexpectedly weak New Zealand gross domestic product (GDP) data. Despite this, Orr did not provide a clear opinion on how the data might impact the interest rate outlook. He emphasized that there is still a considerable distance to cover, particularly with inflation levels remaining elevated.
The U.S. Dollar Index (DXY) is trading higher near 102.20, despite a decline in U.S. Treasury yields. The 2-year and 10-year U.S. bond yields are reported at 4.38% and 3.89%, respectively. Dovish sentiment from the U.S. Federal Reserve (Fed) suggests the potential for a rate cut in early 2024, exerting downward pressure on the U.S. dollar index.
Chicago Federal Reserve President Austan Goolsbee issued a cautionary note in a Wednesday morning interview with Fox, stating that market enthusiasm for possible interest rate cuts may be overly optimistic. Goolsby also mentioned that if inflation continues to decrease, the Fed might reassess the extent of its restrictions.
In U.S. economic indicators, housing starts exceeded expectations at 1.56 million units, surpassing the consensus estimate of 1.36 million units. However, building permits experienced a slight decline to 1.46 million, slightly below the anticipated 1.47 million. Investors are closely monitoring changes in existing home sales and the upcoming results of the Conference Board’s consumer confidence survey set to be released on Wednesday.
