NZD/USD holds positive ground above 0.6100, focus on the US data
- NZD/USD gains ground above the 0.6100 area on Monday.
- The Reserve Bank of New Zealand (RBNZ) is expected to keep its overnight cash rate at 5.50% on Wednesday.
- US New Home Sales data on Monday suggested that higher mortgage rates took a bite out of demand in October.
- Investors await the US economic data ahead of the RBNZ rate decision.
The NZD/USD pair holds above the 0.6100 psychological mark during the early Asian session on Tuesday. The uptick of the pair is bolstered by the US Dollar (USD) weakness. The highlight of this week will be the Reserve Bank of New Zealand (RBNZ) monetary policy meeting on Wednesday. NZD/USD currently trades near 0.6103, gaining 0.07% on the day.
The New Zealand central bank is expected to keep its overnight cash rate at 5.50% for the fourth consecutive meeting on Wednesday, and there is speculation of a future rate cut, although the specific timeframe remains uncertain. Meanwhile, the new Chinese stimulus plan to boost the property sector lends some support to the China-proxy New Zealand Dollar (NZD).
On the USD’s front, the US housing data on Monday suggested that higher mortgage rates took a bite out of demand in October. The Census Bureau and the Department of Housing and Urban Development reported that New Home Sales fell 5.6% MoM to 679K in October, worse than the 725K expected. Meanwhile, the Dallas Fed Manufacturing Index for November dropped to -19.9 versus -19.2 prior. That being said, the softer US data weighs on the Greenback and acts as a tailwind for the pair.
Traders will keep an eye on the US data on Tuesday, including the US Housing Price Index, the S&P/Case-Shiller Home Price Indices, CB Consumer Confidence, and the Richmond Fed Manufacturing Index. The attention will shift to the RBNZ interest rate decision on Wednesday. These events could trigger volatility in the market and provide a clear direction for the NZD/USD pair.