NZD/USD retraces intraday gains amid improved Kiwi Consumer Confidence

• NZD/USD experiences pressure despite upbeat data from New Zealand.
• Kiwi Consumer Confidence improved to 91.9 in November from 88.1 prior.
• RBNZ Deputy Governor Christian Hawkesby said on Friday, “High and sticky core inflation leaves little room for error.”
• China's Caixin Manufacturing PMI rose to 50.7 and defied the anticipated decline to 49.8.

NZD/USD trims its intraday gains, still trading higher near 0.6160 during the Asian session on Friday. The NZD/USD pair received upward support as the US Dollar (USD) drifted lower on the back of subdued US bond yields. Additionally, New Zealand’s Roy Morgan Consumer Confidence released for November by the ANZ, showed that consumer confidence improved to 91.9 from 88.1 prior. The improved data could have supported the Kiwi pair’s strength.

Furthermore, the little hawkish remarks, from the Reserve Bank of New Zealand (RBNZ) Deputy Governor Christian Hawkesby, could provide support for the New Zealand Dollar (NZD). Hawkesby said on Friday, “High and sticky core inflation leaves little room for error.” Deputy Governor Hawkesby also concerned that certain measures of inflation expectations have shown an increase. New Zealand could benefit from a period of restrained spending. The majority of borrowers are currently able to manage their debt at the current interest rate levels.

In November, China's Caixin Manufacturing PMI surpassed expectations, rising to 50.7 and defying the anticipated decline to 49.8 from the previous reading of 49.5. This unexpected positive turn in the data has the potential to offer support and strengthen the Kiwi Dollar, considering the economic dynamics between China and New Zealand.

The US Dollar Index (DXY) faces a challenge as the US Bond yields react subdued, countering recent gains. The mixed US data might have helped the Greenback to gain ground. The US Core Personal Consumption Expenditures Price Index (PCE) displayed a MoM easing to 3.5% in October, down from the previous reading of 3.7%. In the labor market, Initial Jobless Claims for the week ending November 24 totaled 218K, slightly below the expected 220K. These indicators provide insights into inflation trends and the labor market's health, influencing economic assessments and potential policy decisions.

The upcoming release of the US ISM Manufacturing PMI for November and the speech by US Federal Reserve (Fed) Chairman Jerome Powell on Friday are events that can significantly influence market dynamics. Investors will be keenly observing these developments as they can play a pivotal role in shaping the trajectory of the US Dollar. Powell's remarks, in particular, may provide insights into the Fed's stance on monetary policy and its outlook on the economic landscape.