NZD/USD extended its losses amid a steady US dollar, trading near 0.6120

• NZD/USD trades lower around 0.6120 as US Dollar remains firm.

• Stronger US NFP data contributed support to underpinning the Greenback.

• US Fed is expected to maintain the cash rate at 5.5% in December’s meeting.

• New Zealand’s GDP data for Q3 is expected to decline from the previous quarter’s growth.

NZD/USD extended its losses for a second straight trading session, bidding around 0.6120 in Asian hours on Monday. Strong employment data triggered an upward movement in US bond yields, which contributed to the strengthening of the US dollar (USD) and in turn put pressure on the Kiwi pair.

US nonfarm payrolls for November showed a significant increase, reaching 199,000 compared to an increase of 150,000 in October, beating market expectations of 180,000. US average hourly earnings (year-over-year) held steady at 4.0%, in line with November market estimates. Moreover, the unemployment rate has come down to 3.7% from 3.9% previously. Additionally, December’s preliminary Michigan Consumer Sentiment Index rose to 69.4, a significant increase from the previous reading of 61.3.

The US Dollar Index (DXY) is trading above 104.00 at the time of writing trying to gain ground for another session. The 2-year and 10-year US bond coupon yields stood at 4.24% and 4.73%, respectively.

Market participants speculate on the future course of the U.S. Federal Reserve’s (Fed) monetary policy and how long the central bank plans to keep rates at restrictive levels. However, the consensus expectation is that the Fed will keep interest rates at 5.5% at its upcoming monetary policy meeting on Wednesday.

Investors will be closely watching Tuesday’s US Consumer Price Index (CPI) data for additional insights and its potential impact on markets. Focusing on Kiwi’s economic agenda, third quarter gross domestic product (GDP) data is scheduled for release on Thursday. Estimates suggest a 0.2% increase, a decline from the previous quarter’s 0.9% expansion.