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US equities rallied up, while the bond yields went down (the yield on the US 10-year dropped 10 bps to 4.34%) after the US inflation pressures eased and retail sales data came out lower than expected. The headline inflation rose by 0.3% m/m which was bit lower than what was expected. US Retail Sales data was weak too, with no change in the headline figure compared to the expectation of 0.4% m/m. This led the USD to weaken against other currencies, and risk assets rallied.
USD DXY (US Dollar Index) has now fallen below 105. Whether it stays there depends on future US economic data and if the market predicts more interest rate cuts by the Fed Reserve. If US data continues to weaken and market expects more rate cuts, the DXY could fall even further to 102.70 or maybe even lower.
NZD performed well against the USD due to the dollar’s weakness, gaining against most currencies. However, whether these gains continue might rely on the Reserve Bank of New Zealand (RBNZ) not sending a pessimistic message next week. If the USD stays weak, NZDUSD could aim for 0.6150 as the next target, with support around 0.6050.
NZDAUD struggled to surpass 0.9130 in yesterday’s local trading session but managed to break through last night. The RBNZ’s position is crucial here, and there might be some fluctuations in NZDAUD today due to Aussie job data. However, considering the current momentum, the pair could move towards 0.9165.
Here are the latest mid-market rates:
| Currency Pair | Mid-market rate |
| NZD/USD | 0.6123 |
| NZD/AUD | 0.9144 |
| NZD/JPY | 94.68 |
| NZD/CNY | 4.4192 |
| NZD/EUR | 0.5624 |
| NZD/GBP | 0.4826 |
| NZD/HKD | 4.7825 |
| NZD/SGD | 0.8232 |
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