• NZDUSD has witnessed fresh demand around 0.6000 amid euphoria in the risk profile.
• Fed policymakers still favor the continuation of policy tightening despite a noteworthy decline in US CPI.
• Kiwi bulls have not reacted much to the downbeat Business NZ PMI data.

The NZDUSD pair has recovered after a mild correction to near the psychological support of 0.6000 in the early Asian session. The corrective move has provided an opportunity to smart money to get injected amid the euphoric market mood. Noteworthy signs of a cool down in red-hot US inflation have improved the risk appetite of the market participants significantly.

A sheer decline in the US Consumer Price Index (CPI) has brought a bloodbath in the US Treasury yields. Investors went strongly for loading US government bonds, which dragged the 10-year US Treasury yields to 3.8%. Meanwhile, the US dollar index (DXY) is eyeing an establishment below 108.00 as investors are expecting a slowdown in the current pace of policy tightening by the Federal Reserve (Fed).

On contrary, Fed policymakers are of the view that the Fed will continue its restrictive policy measures given the persistent nature of inflation. San Francisco Fed President Mary Daly and Dallas Fed President Lorie Logan cheered a slowdown in the price growth but still warn that fight against inflation is far from over.

On Friday, US markets will remain closed on account of Veterans Day. Investors will focus on the release of the US Michigan Consumer Sentiment Index (CSI) data, which is seen lower at 59.5 vs. the prior release of 59.9. It seems that vulnerable inflationary pressures have impacted consumers’ sentiment.

Meanwhile, downbeat Business NZ PMI data has failed to impact the Kiwi bulls. In early Asia, the economic data landed at 49.3, lower than the projections of 52.7 and the prior release of 51.7. Going forward, investors will keep an eye on Business NZ Services data, which will release on Monday.