NZD/USD retreats to near 0.5850 as USD recovers in data-packed week

• NZD/USD falls again near 0.5850 amid US Dollar recovery.
• S&P Global reported that the US manufacturing PMI reached the 50.0 threshold for the first time since November 2022.
• Third quarter GDP and core PCE price index will be released this week.

The NZD/USD pair faces a sell-off near the 0.5880 resistance as the US Dollar bounces strongly. The pair retreats as investors pounce on the US dollar. The US dollar’s appeal improves as investors focus on this week’s crucial US economic readings.

The S&P500 opens bullish, as market sentiment improves due to the delay in Israel’s ground assault plan in Gaza. However, stock-specific action is expected as the third quarter earnings season has begun. The Dollar Index (DXY) rises above 106.00 following the release of preliminary S&P Global PMI data for October.

S&P Global reported that the manufacturing PMI reached the 50.0 threshold for the first time since November 2022. The manufacturing data of 50.0 exceeded expectations of 49.5 and September’s reading of 49.8. The Services PMI came in at 50.9, better than the consensus of 49.9 and the previous release of 50.1.

This week the Gross Domestic Product (GDP) for the third quarter and the underlying price index for Personal Consumption Expenditure (CPI) for September will be published. Economists expect the US economy to have grown an annualized 4.2%, doubling the 2.1% growth rate from the previous reading.

According to estimates, the annual core CPI slowed to 3.7%, compared to 3.9% previously. In monthly terms, the Fed’s preferred inflation indicator grew 0.3%, compared to the 0.1% registered in August.

As for the New Zealand Dollar, investors hope that the Reserve Bank of New Zealand (RBNZ) has stopped raising interest rates as the economic recovery has faltered.