The Kiwi faces downward pressure at 0.5550 as US inflation data fuels expectations of a December Fed rate hike, while New Zealand's 10-year bond yields drop 3 basis points to 4.76%.
Hotter-than-expected US CPI data has fueled hawkish Fed sentiment, with markets pricing an 87% chance of a December rate hike and a 13% chance of a larger 50-basis-point increase. Governor Waller's support for a quarter-point or even half-point move underpins broad dollar firmness.
The pair has fallen for a third straight day to around 0.5550, driven by a firm US Dollar after hotter-than-expected US CPI lifted bets on a December Fed hike to 87% (13% chance of 50bp). Supportive NZ election results for the incumbent National-led coalition only partially offset the dollar strength, and official results on November 27 keep political uncertainty alive.
The 10-year yield is down 3 basis points to 4.76% after strong auction demand, aided by preliminary election results that eased fiscal concerns. A falling yield means the price of the bonds rose, but the yield instrument itself moves lower.
The New Zealand Dollar fell for a third consecutive day, trading near 0.5550 as a robust US Dollar dominates the market. Hawkish sentiment surrounding the Federal Reserve has intensified, with CME FedWatch data showing an 87% probability of a December rate hike following hotter-than-expected US CPI inflation figures.
Hotter-than-expected US CPI inflation data has led traders to price an 87% chance of a December Fed rate hike, and Fed Governor Waller has said he would support a quarter-point increase or even a half-point move if inflation worsens.
The pair trades around 0.5550, down for a third consecutive day, mainly because hotter-than-expected US inflation data strengthened the US Dollar and raised expectations of a Fed rate hike in December to an 87% probability.
It fell 3 basis points to 4.76%, driven by strong auction demand after preliminary election results eased concerns over the country's fiscal outlook.