NZD/USD is under pressure as investors anticipate important US events

NZD/USD is down 0.25 percent at the beginning, with the exchange rate falling from a high of 0.6411 to a low of 0.6382. Nevertheless, it has been the best-performing G10 currency month to date.

"NZD seasonality is typically bullish in December, but while it has that and rising interest rates on its side, there are no assurances that it will emerge from this week unscathed, as multiple central bank meetings are scheduled," ANZ Bank analysts stated.

This week, the Federal Open Market Committee is scheduled to meet, and traders are anticipating a hawkish decision. US producer inflation data for November came in somewhat hotter than anticipated, boosting the argument for future interest rate hikes by the Federal Reserve, albeit at a slower pace.

Analysts at TD Securities anticipate that the FOMC will raise rates by 50 basis points at its December meeting, bringing the target range for the Fed funds rate to 4.25 percent to 4.50 percent. "By doing so, the Committee would move the inflation-adjusted stance of monetary policy into restrictive zone. In September, we expect the FOMC to suggest that they will have to shift to a higher-than-anticipated terminal rate.

"Our primary concern is what this may do to the USD, which has been under pressure as the "pivot" narrative has gained traction despite strong indications of persistent US inflation," ANZ Bank analysts said.

"NZ factors will also play a part, with the HYEFU and GDP due this week," but they are likely to be overshadowed by volatility and the global atmosphere (again!).

In other news, Tuesday's US consumer inflation report will set the tone for markets ahead of the Federal Reserve. Economists anticipate that core inflation would decrease to 6.1% in November from 6.3% the previous month.