NZ Dollar Falls As Traders Await U.S. CPI Data
11 December 2024 - 11:58AM
RTTF2
The New Zealand dollar weakened against other major currencies
in the Asian session on Wednesday, as traders await key U.S.
consumer price inflation readings later in the day that could
influence the U.S. Fed's rate trajectory.
Signals of a policy shift in China boosted sentiment, while
persisting geopolitical tension due to escalating violence in Syria
is weighing on market sentiment.
While the U.S. Fed is widely expected to lower rates by another
25 basis points next week, the data could impact the outlook for
future rate cuts by the central bank.
CME Group's FedWatch Tool is currently indicating an 86.1
percent chance the Fed will lower rates by a quarter point next
week but a 69.1 percent chance the central bank will then leave
rates unchanged in late January.
Investors also focused their attention on the headlines from
China's closed-door Central Economic Work Conference, due this
week.
The NZ dollar, along with other commodity currencies such as the
Australia and the Canadian dollars, fell against its major rivals
on Tuesday, after data showed China's exports growth slowed in
November and imports declined the most in 14 months, fueling
worries about the health of the world's second-largest economy.
In the Asian trading today, the NZ dollar fell to a 1-year low
of 0.5789 against the U.S. dollar and more than a 1-month low of
1.8176 against the euro, from yesterday's closing quotes of 0.5799
and 1.8176, respectively. If the kiwi extends its downtrend, it is
likely to find support around 0.56 against the greenback and 1.83
against the euro.
Against the yen and the Australian dollar, the kiwi dropped to
2-day lows of 87.73 and 1.1007 from Tuesday's closing quotes of
88.12 and 1.0989, respectively. The kiwi may test support near
86.00 against the yen and 1.11 against the aussie.
Looking ahead, U.S. MBA mortgage approvals data, U.S. CPI data
for November, U.S. EIA crude oil data and U.S. monthly budget
statement are slated for release in the New York session.
At 9:45 am ET, the Bank of Canada will announce its interest
rate decision. The BoC is expected to lower the benchmark rate by
50 basis points, following the same action in October, to 3.25
percent.
Following the announcement of the BoC monetary policy decision,
the BoC Governor Tiff Macklem will deliver a speech in a press
conference at 10:30 am ET.
Euro vs NZD (FX:EURNZD)
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