Image Source:
The NZD/USD pair trades flat near 0.5930 during the Asian trading hours on Wednesday. However, the upside of the pair might be limited amid a strengthening of the US Dollar (USD). Traders brace for the US October Consumer Price Index (CPI) and Fedspeak later on Wednesday.
The expectation that inflationary import tariffs from Republican President-elect Donald Trump would push up prices and leave the Federal Reserve’s (Fed) less scope to cut interest rates boosts the USD broadly. However, the attention will shift to the CPI inflation report. The core gauge is expected to rise 0.3% MoM in October. Any signs of hotter inflation could further reduce the chance of a December easing, lifting the Greenback. On the other hand, the softer outcome could prompt traders to raise their bets on Fed rate reductions in December.
“Focus is likely to shift back to inflation and Fed policy in the latter part of the week, but whether that brings an unwinding of Trump trades remains to be seen,” noted Charu Chanana, chief investment strategist at Saxo.
The New Zealand Dollar (NZD) remains vulnerable as US President Donald Trump’s trade policies, especially the specter of higher tariffs on China could weigh on the China-proxy NZD against the USD as China is a major trading partner for New Zealand. More By This Author:WTI Drops To Near $68.00 As OPEC Cuts Demand View GBP/USD Extends The Decline Below 1.2850 Ahead Of UK Employment DataWTI Retreats To Near $68.00 On Chinese Stimulus Disappointment, Stronger US Dollar
