NZD/USD Remains Weak Below 0.5750 After Better-Than-Expected GDP Data

NZD/USD extended its weakness during early Asian trading on Thursday, failing to hold the 0.5750 level despite upbeat New Zealand economic data, trading near 0.5718 at press time after dipping to the 0.5725 line earlier. The broadly firmer US dollar continued to weigh on non-USD currencies.

**GDP Upside Fails to Reverse NZD Selling Pressure**

New Zealand's latest GDP data came in better than market expectations, which theoretically should have supported the NZD. However, market reports indicate that investors are more focused on the upcoming US initial jobless claims data, due later on Thursday, which could further influence USD movements. Ahead of the data release, market sentiment remains cautious, with NZD bulls lacking follow-through conviction.

**USD Liquidity Factors Continue to Pressure**

According to CME market analysis, short-term liquidity strains are still unfolding after the US government shutdown ended, with rising Treasury bill issuance triggering a contraction in bank reserves, exerting periodic pressure on the USD. Meanwhile, Fed officials have collectively signaled holding rates steady, with the probability of a December rate cut falling to around 51%. Policy uncertainty has left the US dollar index oscillating near 99.15, limiting the rebound scope for non-USD currencies.

**Focus on US Employment Data for Direction**

US initial jobless claims, due later on Thursday, will be the key short-term variable. If the data shows continued signs of labor market softening, the USD could give back some gains, offering the NZD a breather; conversely, if the data proves solid, NZD/USD may test support below 0.5700. Until then, the pair is likely to remain in a low-range consolidation pattern.