The New Zealand Dollar continues a four-day losing streak, trading near 0.5540 as weak labor data dampens RBNZ rate hike expectations. Meanwhile, the US Dollar remains firm as markets price in an 87% probability of a 25-basis-point Federal Reserve rate hike at the December 8-9 meeting. Investors are now focused on Friday's US PPI report, with headline inflation expected to rise 6.6% year-on-year.
Bearish
🤖 75%
The kiwi is falling for a fourth straight day, around 0.5540 in Asian hours on Friday, as New Zealand's unemployment rate hit an 11-year high of 5.7%, damping expectations of aggressive RBNZ hikes. Meanwhile, strong US CPI data has traders pricing about 87% odds of a 25bp Fed hike at the December 8-9 meeting, keeping the dollar firm. The RBNZ's single price-stability mandate, backed by the ruling coalition's one-seat majority with final results due November 27, partially cushions the downside.
Catalysts
- ▼ Friday's US PPI report, with October headline PPI forecast +6.6% year-on-year and core +5.0%
- ▼ Fed rate-hike odds near 87% for a 25bp move at the December 8-9 meeting after strong US CPI
Risk Factors
- ▲ Election outcome supporting the RBNZ's sole price-stability mandate underpins NZD by limiting dovish risk
- ▲ A softer-than-expected PPI print on Friday could ease Fed hike bets and lift the pair