NZD/USD loses ground for the third consecutive day, trading around 0.5550 during European hours on Thursday.
The Australian Dollar lost 0.27% against the US Dollar on Wednesday as market participants priced in further Federal Reserve tightening, amid a light economic docket in Australia and the US. The AUD/USD trades below 0.6850.
Deutsche Bank’s Henry Allen and colleagues note that a stronger US CPI print and hawkish Federal Reserve rhetoric triggered a sharp repricing of Fed expectations, lifting the Dollar Index and weighing on EUR/USD. Markets now fully price a 25 bp Fed hike in December and see some risk of 50 bp, while US yields surged across the curve, reinforcing Dollar strength.