NZD/USD rallies toward 0.6250 on improved economic data from New Zealand

• NZD/USD surges on improved economic data from New Zealand.
• Westpac Consumer Survey and Business NZ PSI improved to 88.9 and 51.2, respectively.
• The dovish comments from Fed officials contributed to pressure to undermine the US Dollar.

NZD/USD continues to move on an upward trajectory that began on December 11, trading higher around 0.6240 during the European session on Monday. The New Zealand Dollar (NZD) gains ground against the US Dollar (USD) on the back of improved Kiwi economic data.

Westpac New Zealand revealed a Consumer Survey for Q4, which showed an improvement from the previous readings of 80.2 to 88.9. Business NZ Performance of Services Index (PSI) for November rose to 51.2 from the previous 49.2 figures. On Friday, Business NZ Performance of Manufacturing Index (PMI) improved to 46.7 from 42.5 prior.

On the flip side, Atlanta Fed President Raphael Bostic has suggested the potential for an interest rate cut in the third quarter of 2024, if inflation falls as expected. Meanwhile, Chicago Fed President Austan Goolsbee has not ruled out the possibility of a rate cut at the Federal Reserve’s meeting next March.

These dovish comments from Federal Reserve officials contributed to the surge in prices of US Treasury bonds, which in turn, pushed down the US yields. The lowered US yields put pressure on the US Dollar Index (DXY). The DXY hovers below 102.50, by the press time.

Market participants seek further impetus on economic conditions in both countries. New Zealand will release Trade Data, the NZ Business Confidence survey, and ANZ – Roy Morgan Consumer Confidence. The United States will release Housing data on Tuesday.