NZD/USD extends its gains above 0.6050, focus on US PMI
- NZD/USD receives upward support after support from upbeat Kiwi Retail Sales data.
- The new Chinese stimulus plan has given a boost to market sentiment.
- The increase in US Treasury yields could support the US Dollar.
NZD/USD trades higher for the second successive session, trading near 0.6060 during the European session on Friday. The Kiwi pair is propelled by the better-than-expected release of Retail Sales figures from New Zealand. The figures showed unexpected stability, printing a flat 0.0% reading during the third quarter of 2023. Market expectations were for a 0.8% decline in the headline figure.
Furthermore, Retail Sales excluding automobiles surpassed consensus estimates, defying expectations of a 1.5% fall and instead rising by 1.0% during the reported period. This positive performance serves as a tailwind for the NZD/USD pair.
The prospect of a new Chinese stimulus plan has given a boost to market sentiment. Reports suggest that Chinese authorities have included Country Garden Holdings Co on a list of 50 eligible property developers with access to financing. Positive developments in China can have a ripple effect on currencies like the NZD that are sensitive to the Chinese economy.
Investors seem betting on that the Federal Reserve (Fed) has concluded its policy-tightening campaign and are now factoring in the possibility of a rate cut by May 2024. This sentiment has cast a negative shadow on the US Dollar in anticipation of Friday's release of the US S&P Global PMI data, which are expected to decline.
US Treasury yields have exhibited improvement during the Asian session on Friday, following the Thanksgiving Holiday in the United States, in an attempt to shift the Greenback into positive territory.
Additionally, the hawkish tone in the Federal Open Market Committee (FOMC) minutes released on Tuesday, coupled with Wednesday's optimistic US labor market and consumer sentiment data, is holding back bears from making fresh bets against the USD. This, in turn, acts as a headwind for the NZD/USD pair.