NZD/USD finds its bottom amid mixed US data, falling US yields

• NZD/USD rebounds from daily lows, trading at 0.5944, amidst a backdrop of varied US economic data.
• US Initial Jobless Claims slightly up, while the trade deficit narrows to a three-year low, offering a mixed impact on the USD.
• Money market futures begin pricing in potential Fed rate cuts for June 2024, despite Fed projections.

The New Zealand Dollar (NZD) gained traction versus the Greenback (USD) early in the New York session, following a round of economic data from the United States that failed to underpin the safe-haven status of the USD. At the time of writing, the NZD/USD exchanges hands at 0.5944 after bouncing from daily lows of 0.5907.

The NZD/USD resumed its uptrend as US economic data, US Treasury bond yields present a mixed picture

The ongoing pullback in the Greenback is bolstering most G7 currencies. The US Bureau of Labor Statistics (BLS) revealed the Initial Jobless Claims for the week ending September 30 raised to 207K, below forecasts of 210K, but exceeding the prior week’s reading of 205K. Although it shows a minuscule uptick, the labor market remains tight. At the same time, the US Department of Commerce announced the US trade deficit narrowed to a three-year low in August, with numbers coming at $-56.3 billion, below the consensus of $-62.3 billion, and July’s $-64.7 billion.

Although the data was US Dollar-supportive, the drop in US Treasury bond yields is a headwind for the buck. The US Dollar Index (DXY), which measures the Greenback’s value against six currencies, falls 0.21% to 105.54.

US bond yields are dropping while money market futures began to price in US Federal Reserve (Fed) rate cuts for June of 2024. That contradicts the latest Fed projections of keeping rates at around 5.10%, by Fed officials. According to the CME FedWatch Tool, traders expect rates to drop towards 4.50%-4.75%.

Aside from this, the New Zealand (NZ) economic docket during the Asian session revealed the Commodity Price Index for September, which showed an increase of 1.2%, above the latest -2.9% plunge in the previous period. In addition, the latest NZIER Business Confidence dropped 52% in Q3 compared to Q2’s 63% slump.

NZD/USD Key Technical Levels