NZD/USD traded higher around 0.5680 on Friday, rising 0.60% as the US Dollar stayed under pressure ahead of the long-delayed release of key US economic data. The US Dollar Index remains near a two-week low, reflecting persistent vulnerability in the Greenback as uncertainty clouds the macro outlook.
Markets have recently trimmed expectations for an aggressively dovish Federal Reserve, with several officials emphasizing the need to tame above-target inflation. Still, ambiguity over forthcoming data including whether October’s CPI will be published keeps the USD on the defensive. US Labor Secretary Julie Chavez-Deremer warned that incomplete data collection may prevent the BLS from releasing the October CPI report.
Investors suspect that once the backlog clears, labor-market softness could reappear in the numbers, potentially adding further pressure on the Dollar.
China data offers a modest boost, but domestic weakness lingers
The New Zealand Dollar also drew support from slightly better-than-expected Chinese indicators, with October Retail Sales rising 2.9% YoY. Nevertheless, the Kiwi’s upside remains capped by deteriorating domestic fundamentals.
The Reserve Bank of New Zealand cut the Official Cash Rate by 50 bps at its October meeting, while the unemployment rate climbed to 5.3% the highest level in almost nine years. These developments reinforce expectations of additional easing later this year.
Against this backdrop, NZD/USD’s latest rebound appears driven more by US Dollar weakness than by improvements in New Zealand’s economic outlook.
