Ella 
In Asia on Thursday, NZD/USD hit an 11-month low, hovering around 0.5790. NZD/USD could hit November lows this session.
The New Zealand dollar is under pressure, with the latest Consumer Price Index (CPI) data adding to the woes. The indicator prompted investors to lower their expectations for an interest rate hike by the Reserve Bank of New Zealand (RBNZ).
New Zealand’s consumer price index rose to 1.8% in the third quarter, below expectations of 2.0%. New Zealand’s third-quarter inflation fell to an annualized rate of 5.6% from 6.0% previously, further below expectations of 5.9%.
Uncertainty over the geopolitical situation has cast a shadow over NZD/USD and risk sentiment has taken a hit. The latest flashpoint appears to be Israeli Prime Minister Benjamin Netanyahu’s statement about a possible ground attack on Gaza, with the timing of such an attack dependent on consensus. This reinforces the current market risk aversion and intensifies the downward pressure on NZD/USD.
In addition, Iranian Foreign Minister Hussein Amir Abdullahian visited the United States to discuss the conflict between Hamas and Israel, according to Iranian media reports.
The U.S. dollar index continues to move higher, rising to around 106.80 at press time. The U.S. dollar (USD) has been supported by a recent surge in U.S. Treasury yields, with targets back above 5.0%. As of press time, the 10-year U.S. Treasury yield was 4.97%.
However, NZD/USD’s losses may be somewhat limited due to various comments from Fed officials on the path of interest rates in the past few days. Atlanta Fed President Raphael Bostic said a rate cut before the middle of next year is unlikely, while Philadelphia Fed President Patrick Harker expressed a preference to keep interest rates unchanged.
The U.S. third-quarter gross domestic product data to be released later in the North American session will be an important indicator of the performance of the U.S. economy. This will be followed on Friday by the release of the core personal consumption expenditures index, which will provide a signal of price fluctuations in U.S. goods and services. In the New Zealand dollar, the focus is on Friday’s consumer confidence index, a key indicator of economic confidence and economic prospects.
