NZD/USD retreats from 0.6000 as US yields climb

• NZD/USD pair is trading down after printing three- days of consecutive gains.
• A resurgence in U.S. Treasury bond yields has provided support to the U.S. Dollar, as indicated by the steadying of the US Dollar Index (DXY).
• Federal Reserve speakers, including Lisa Cook, Michael Barr, Jeffrey Schmid, and Christopher Waller, are scheduled to speak, potentially offering insights into future monetary policy.

NZD/USD capped its advance toward the 0.6000 area as US Treasury bond yields rose and so far dragged the Greenback (USD) toward its Monday’s opening price, as shown by the US Dollar Index (DXY). The pair exchanges hands at 0.5977, down 0.37%.

Kiwi dollar pulls back from highs as rising U.S. Treasury yields bolster the U.S. Dollar, with investors eyeing central bank cues

A scarce economic docket in the United States (US) throughout the present week would witness the update of the Balance of Trade, IBD/TIPP Economic Optimism, unemployment claims, and consumer sentiment. Additionally, US Federal Reserve (Fed) officials will begin their parade on Monday with Lisa Cook, followed by Michael Barr, Jeffrey Schmid, and Christopher Waller on Tuesday.

It should be said that after last week’s decision, it would be interesting to see Fed officials push back against market participants already pricing in 100 bps of cut toward the end of next year. One of the reasons they used to hold rates unchanged was the high yields on the long end of the curve, as most expressed that it tightened monetary conditions and helped them to do the job. However, following the Fed’s hold, the 20 and 30 US bond yields plunged more than 30 bps, as investors suggest the Fed is done raising rates.

It seems that market participants have overreacted to last week’s US Nonfarm Payrolls report, which showed the economy added 150K jobs in October, below forecasts of 180K, and September’s downward revised 297K. Although the labor market is easing, the report is just the second one in eleven months that missed estimates.

On the New Zealand front, the Kiwi would gather direction from the New Zealand Business PMI data. It should be said that a soft labor market and wage growth cooling, would refrain the Reserve Bank of New Zealand (RBNZ) from raising rates, past the 5.50% threshold.

NZD/USD Technical Levels