NZD/USD defends 0.6200 amid cheerful market mood, US Retail Sales eyed

• NZD/USD finds support near 0.6200 as the broader sentiment is bullish.
• Monthly US Retail Sales are seen contracting by 0.1%.
• The NZ economy surprisingly contracted by 0.3% in Q3.

The NZD/USD pair finds buyers’ interest after a nominal correction to near the round-level support of 0.6200 in the early New York session. The broader outlook for the Kiwi asset is upbeat as the market mood is quite cheerful due to surprisingly dovish commentary by the Federal Reserve (Fed).

The S&P500 is expected to open on a positive note, considering strength in overnight futures. The 10-year US Treasury yields have dropped further to near 3.94% as the Fed is done with hiking interest rates.

Fed Chair Jerome Powell, in his monetary policy statement on Wednesday, announced three rate cuts in 2024 against expectations of ‘higher for longer’ interest rates message, which battered the US Dollar. Powell didn’t declare victory over inflation but his confidence in the resilience of the labor market and cooling inflation projections raised expectations for a ‘soft landing’.

Meanwhile, investors await the monthly US Retail Sales data for November, which will be published at 13:30 GMT. The economic data is seen contracting at a steady pace of 0.1%. A more-than-anticipated decline in consumer spending would elevate pressure on the US Dollar. The US Dollar Index (DXY) extends downside to near 104.30, at the time of writing.

On the Kiwi front, weak Q3 Gross Domestic Product (GDP) numbers kept the New Zealand Dollar on the backfoot. The NZ economy contracted by 0.3% while investors forecasted a growth rate of 0.2%. In the prior period, the economy expanded by 0.5%.