Tag: NZDUSD

  • NZD/USD extends upside above 0.6000 on weaker US data

    NZD/USD extends upside above 0.6000 on weaker US data


    • NZD/USD gains traction to around 0.6035 in Thursday’s early Asian session.
    • US ISM Services PMI unexpectedly contracted in May, the first time in nearly a year.
    • The RBNZ might slow the pace of rate cuts as uncertainty grows. 

    The NZD/USD pair extends the rally to around 0.6035 during the early Asian session on Thursday. The US Dollar (USD) softens against the New Zealand Dollar (NZD) due to the concern over mounting economic and political uncertainty in the US economy. Investors await the Chinese Caixin Services PMI, which is due later on Thursday. 

    The weaker-than-expected US economic data released on Wednesday exert some selling pressure on the Greenback and create a tailwind for the pair. Data released by the Institute for Supply Management (ISM) revealed that the US Services Purchasing Managers Index (PMI) declined to 49.9 versus 51.6 prior. This reading came in weaker than the market expectation of 52.0.

    Additionally, US ADP private sector employment rose 37,000 in May, compared to a 60,000 increase (revised from 62,000) recorded in April, missed the market expectation of 115,000 by a wide margin.

    The expectation that the Reserve Bank of New Zealand (RBNZ) will slow the pace of interest rate cuts as uncertainty grows could provide some support to the Kiwi. “While the RBNZ downgraded its economic forecasts compared to February and emphasized the high degree of uncertainty around global conditions, there was a surprising amount of caution around the timing and extent of further OCR cuts,” said Westpac senior economist Michael Gordon.

    Investors will closely monitor the developments surrounding the US and China trade talks. US Treasury Secretary Scott Bessent said on Sunday that Trump and Xi Jinping were expected to meet soon to resolve trade disputes, although on Monday there was an from China’s Commerce Ministry of US accusations that Beijing violated their trade agreement. Any sign of signs of renewed trade tensions could undermine the China-proxy Kiwi as China is a major trading partner of New Zealand. 

    New Zealand Dollar FAQs

    The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.

    The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.

    Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.

    The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.



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  • NZD/USD strengthens to near 0.6000, eyes on potential US-China talks

    NZD/USD strengthens to near 0.6000, eyes on potential US-China talks


    • NZD/USD gains ground to near 0.6000 in Wednesday’s early Asian session. 
    • US JOLTS Job Openings rose to 7.39 million in April, above the consensus. 
    • US President Trump and Chinese President Xi Jinping were likely to have a call soon. 

    The NZD/USD pair holds positive ground around 0.6000 during the early Asian session on Wednesday. The US Dollar (USD) weakens against the New Zealand Dollar (NZD) amid concerns over the impact of US President Donald Trump’s tariffs on the US economy and global trade.

    The Greenback edges lower as traders remain concerned over the ongoing tariff uncertainty and its potential to hurt growth in the US economy. The US manufacturing sector has continued a trend of contraction for three consecutive months, which contributes to the USD’s downside. 

    Separately, the number of job openings on the last business day of April stood at 7.39 million versus 7.2 million prior, the US Bureau of Labor Statistics (BLS) reported in the Job Openings and Labor Turnover Survey (JOLTS) on Tuesday. This figure came in above the market expectation of 7.1 million.

    US Treasury Secretary Scott Bessent said on Sunday that Trump and Xi Jinping were expected to meet soon to resolve trade disputes, although on Monday there was a response from China’s Commerce Ministry to US accusations that Beijing violated their trade agreement.  

    The US Nonfarm Payrolls (NFP) report for May will be closely monitored, which is expected to show 130K job additions. If the report showed a stronger-than-expected outcome, this might lift the USD and cap the upside for the pair. 

    New Zealand Dollar FAQs

    The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.

    The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.

    Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.

    The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.



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  • New Zealand ANZ – Roy Morgan Consumer Confidence dipped from previous 98.3 to 92.9 in May




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  • NZD/USD holds positive ground near 0.5900 as New Zealand Retail Sales beat expectations

    NZD/USD holds positive ground near 0.5900 as New Zealand Retail Sales beat expectations


    • NZD/USD edges higher to around 0.5900 in Friday’s early Asian session.
    • New Zealand Retail Sales beat expectations in Q1. 
    • A stronger US S&P Global PMI might cap the pair’s upside. 

    The NZD/USD pair posts modest gains near 0.5900 during the early Asian session onn Thursday. The upbeat New Zealand Retail Sales data provide some support to the Kiwi against the US Dollar (USD). Traders will keep an eye on the speeches from the Federal Reserve (Fed) officials later on Friday, including Alberto Musalem, Jeff Schmid and Lisa Cook. 

    New Zealand Retail Sales were stronger than expected in the first quarter (Q1) this year as interest-rate cuts triggered improved consumer demand and confidence. The country’s Retail Sales rose 0.8% QoQ in Q1 from the previous reading of 0.9%, according to the official data published by Statistics New Zealand on Friday.  The upbeat New Zealand economic data underpin the China-proxy Kiwi, as China is a major trading partner of New Zealand.

    On the other hand, the stronger US S&P Global Purchasing Managers Indices (PMIs) might boost the Greenback and drag the pair lower. Fed Governor Christopher Waller said that markets are monitoring fiscal policy. Waller further stated that if tariffs are close to 10%, the economy would be in good shape for H2, and the Fed could be in a position to cut later in the year. Markets have priced in nearly a 71% chance that the Fed would keep its interest rates steady through its next two meetings, according to the CME FedWatch tool.

    New Zealand Dollar FAQs

    The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.

    The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.

    Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.

    The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.



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  • NZD/USD dips as cautious Fed tone and weak NZ backdrop pressure pair

    NZD/USD dips as cautious Fed tone and weak NZ backdrop pressure pair


    • The pair trades near the 0.5900 zone after slipping 0.40%, pressured by softer New Zealand outlook and steady US Dollar.
    • US PPI and Retail Sales missed expectations, but Fed’s Powell struck a cautious tone supporting Greenback stability.
    • Technical bias is bearish; support at 0.5860 and 0.5846, resistance at 0.5878 and 0.5884.

    The NZD/USD is trading around the 0.5900 level on Thursday, facing renewed pressure amid cautious investor sentiment and diverging macroeconomic signals. Despite softer-than-expected inflation and retail sales data in the US, comments from Federal Reserve Chair Jerome Powell offered enough reassurance to keep the Greenback on stable footing. Meanwhile, the New Zealand Dollar struggled to gain traction amid local fiscal announcements that failed to inspire a bullish response.

    US data released on Thursday showed the Producer Price Index (PPI) rising 2.4% annually in April, below expectations of 2.5%, while Retail Sales increased just 0.1%, falling short of broader market hopes. These releases added to growing speculation that the Federal Reserve could begin easing rates later in 2025. However, in his remarks at the Thomas Laubach Research Conference, Powell highlighted the need to revisit the Fed’s policy framework in light of persistent supply shocks, reaffirming a measured and patient approach to rate changes. This neutral stance helped the US Dollar recover from intraday losses and limited downside momentum.

    In contrast, New Zealand’s economic narrative remains soft. Finance Minister Nicola Willis unveiled a NZ$190 million social investment fund, aimed at improving long-term outcomes for vulnerable groups. While the initiative underscores fiscal discipline and targeted intervention, it had limited immediate impact on NZD sentiment. Market focus now shifts to Thursday evening’s Business NZ Performance of Manufacturing Index and Friday’s RBNZ inflation expectations survey, both of which may shape expectations for future rate decisions by the Reserve Bank of New Zealand.

    NZD/USD technical outook

    From a technical perspective, NZD/USD maintains a bearish bias, with the pair slipping toward the mid-point of the daily range between 0.5860 and 0.5916. The Relative Strength Index (RSI) hovers in the 40s, showing weak momentum, while the MACD prints a sell signal. Additional neutral signals from the Stochastic %K, Commodity Channel Index (CCI), and Bull Bear Power suggest a lack of conviction for a rebound. Short-term indicators including the 10-day EMA and 20-day SMA reinforce downside pressure, while only the 100-day SMA offers modest bullish support.

    Key support levels are seen at 0.5860, 0.5846, and 0.5829, while resistance lies near 0.5878, 0.5883, and 0.5884. Unless upcoming New Zealand data surprises to the upside, the pair may continue drifting lower as investors favor the relative safety of the US Dollar in a cautious macro environment.



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  • NZD/USD remains stronger near 0.5900 as US Dollar struggles ahead of key economic data

    NZD/USD remains stronger near 0.5900 as US Dollar struggles ahead of key economic data


    • NZD/USD finds support as the US Dollar falters amid ongoing trade-related uncertainties.
    • Market attention now turns to Thursday’s upcoming releases of US Retail Sales and Producer Price Index (PPI) data.
    • The New Zealand Dollar is drawing support as trade tensions between the US and China show tentative signs of easing.

    NZD/USD appreciates after registering a loss of more than 0.50% in the previous session, trading around 0.5910 during the early European hours on Thursday. The NZD/USD pair receives support as the US Dollar also struggles as investors weigh ongoing trade-related uncertainties despite a slight easing in tensions. Market focus now shifts to the release of US Retail Sales and Producer Price Index (PPI) data later in the day.

    Speculation is building that Washington may prefer a weaker dollar to bolster its trade position. The Trump administration has argued that a strong Greenback, relative to weaker regional currencies, disadvantages US exporters.

    However, downside pressure on the USD may be limited. Improved global trade sentiment has eased recession concerns, reducing expectations for aggressive Federal Reserve (Fed) rate cuts. According to LSEG data, markets now price in a 74% chance of a 25-basis-point cut in September, down from earlier forecasts for a July cut.

    The New Zealand Dollar (NZD) is gaining support amid signs of easing tensions in the US-China trade dispute, largely due to New Zealand’s strong trade ties with China. The US and China have reached a temporary agreement to scale back mutual tariffs, easing concerns about a potential full-scale trade war between the world’s two largest economies. As part of the deal, the US reduced tariffs on Chinese goods from 145% to 30%, while China cut tariffs on US imports from 125% to 10%. These revised rates will remain in place for 90 days.

    New Zealand Dollar FAQs

    The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.

    The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.

    Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.

    The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.



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  • NZD/USD steadies near bottom of range as Dollar weakens on soft inflation and policy concerns

    NZD/USD steadies near bottom of range as Dollar weakens on soft inflation and policy concerns


    • The pair trades near the 0.5900 zone after trimming intraday losses amid mixed technical signals.
    • Weak US inflation and speculation of a soft-Dollar policy weigh on the Greenback.
    • Support at 0.5884; resistance seen at 0.5908 and 0.5928 with technicals pointing to possible rebound.

    The NZD/USD pair is hovering near the 0.5900 level after giving back earlier gains in Wednesday trading. The pair remains under modest pressure but shows signs of stabilization as price action consolidates near the lower end of the daily range. The subdued performance in the Kiwi comes as the US Dollar struggles across the board, weighed down by fresh speculation of a deliberate US Dollar weakening strategy and signs of a cooling inflation trend.

    Market focus remains on the broader narrative that the Trump administration may be supporting a weaker USD as part of its trade realignment push. Talks between US and South Korean officials regarding FX policy have triggered a wave of USD selling across Asia, adding pressure on the Greenback. The recent dip in US headline Consumer Price Index (CPI) to 2.3% year-over-year, the softest since February 2021, has also amplified rate cut expectations. Although the Fed is expected to remain on hold in the near term, swaps markets are still pricing in 75 basis points of easing over the next year, down from 125 bp last week.

    Meanwhile, New Zealand’s economic outlook remains clouded by expectations of a dovish shift from the Reserve Bank of New Zealand (RBNZ). Analysts widely anticipate the RBNZ to lower the Official Cash Rate (OCR) at its next policy meeting, citing weaker domestic growth prospects. With no major data from New Zealand this week, NZD price action is driven mostly by external developments, particularly the shifting sentiment around the US Dollar.

    Technical Analysis

    Technically, the NZD/USD pair is trading close to its daily low near 0.5896, within a broader range between 0.5884 and 0.5969. The Relative Strength Index (RSI) sits in neutral territory in the 50s, while the Moving Average Convergence Divergence (MACD) remains in negative territory, signaling downside momentum. However, Bull Bear Power is trending near the zero line, hinting at underlying buy conditions. The Stochastic Relative Strength Index (Stochastic RSI) – Fast also reflects a neutral posture. While the 20-day Simple Moving Average (SMA) points to continued bearishness, both the 100-day and 200-day Simple Moving Averages (SMAs) are aligned with a bullish bias, supported by the 30-day Exponential Moving Average (EMA) and 30-day SMA as well. Immediate support levels are seen at 0.5884, 0.5885, and 0.5885, while resistance lies at 0.5908, 0.5920, and 0.5928. With several long-term technical indicators signaling upside potential and the pair trading at a key support area, NZD/USD retains a mildly bullish bias, provided broader USD softness continues.



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  • NZD/USD extends upside above 0.6000 on weaker US data

    NZD/USD retreats as Fed signals caution and Kiwi struggles on mixed jobs data


    • NZD/USD consolidates near 0.6000 after touching a six-month high.
    • Fed leaves rates unchanged but highlights rising inflation and unemployment risks.
    • Technical indicators present a mixed outlook, with key support at 0.5920 and resistance at 0.5950.

    The NZD/USD pair is pulling back from a six-month high near 0.6025 reached earlier on Wednesday, trading around 0.6000 as investors react to the Federal Reserve’s (Fed) cautious policy tone and mixed economic data from New Zealand. The Fed kept its policy rate unchanged at 4.25%-4.50% in line with market expectations but acknowledged rising inflation and unemployment risks, adding a layer of uncertainty to the market.

    The Fed’s policy statement reaffirmed its data-dependent approach, highlighting that inflation remains “somewhat elevated” and that risks to both unemployment and inflation have increased. This cautious tone, combined with ongoing balance sheet reduction, has supported the US Dollar (USD), putting pressure on the New Zealand Dollar (NZD). The US Dollar Index (DXY) remains steady near 99.50, reflecting cautious market sentiment ahead of Fed Chairman Jerome Powell’s press conference.

    Meanwhile, New Zealand’s Q1 labor market data added to the Kiwi’s struggles. The unemployment rate remained unchanged at 5.1%, surprising markets that expected a slight increase to 5.3%. However, the Labor Cost Index grew at a slower pace than expected, reinforcing expectations for further easing by the Reserve Bank of New Zealand (RBNZ). The RBNZ is likely to maintain a dovish stance, with markets pricing in additional rate cuts over the coming months.

    Technical Analysis

    Technically, NZD/USD faces initial resistance at 0.5943, followed by 0.5948 and 0.5952. On the downside, support is seen at 0.5930, 0.5915, and 0.5886. The RSI is neutral at 55.28, while the MACD shows a bearish divergence, suggesting a potential correction. However, longer-term moving averages, including the 100-day SMA (0.5728) and 200-day SMA (0.5886), signal a more bullish outlook, keeping the broader trend intact.

    In summary, the NZD/USD outlook remains mixed as the pair consolidates recent gains, with market sentiment likely to hinge on Fed guidance and further clarity on New Zealand’s economic path.

    Daily Chart



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  • NZD/USD remains confined in a narrow range below mid-0.5900s after Chinese PMIs

    NZD/USD remains confined in a narrow range below mid-0.5900s after Chinese PMIs


    • NZD/USD lacks any firm intraday direction amid a combination of diverging forces.
    • A positive risk tone supports the Kiwi, though a modest USD uptick caps the major.
    • Mixed Chinese PMIs do little to provide any meaningful impetus to spot prices.

    The NZD/USD pair struggles to gain any meaningful traction during the Asian session on Wednesday and languishes near the lower end of a nearly two-week-old trading range. Spot prices hold steady around the 0.5930 region and move little following the release of Chinese PMIs.

    The National Bureau of Statistics reported that China’s official Manufacturing Purchasing Managers’ Index (PMI) contracted to 49 in April, compared to 50.5 in the previous month and 49.9 expected. Moreover, the NBS Non-Manufacturing PMI eased more than expected, to 50.4 in the current month from 50.8 in March. However, China’s Caixin Manufacturing PMI fell from 51.2 to 50.4 in April, beating the market forecast of 49.9. The data fails to provide any meaningful impetus to antipodean currencies, including the Kiwi, amid mixed signals about US-China trade talks.

    However, a positive risk tone – bolstered by the potential for a de-escalation of trade tensions between the world’s two largest economies and progress on trade negotiations – acts as a tailwind for the perceived riskier New Zealand Dollar (NZD). That said, a modest US Dollar (USD) strength holds back traders from placing fresh bullish bets around the NZD/USD pair. Meanwhile, the range-bound price action witnessed over the past two weeks or so warrants some caution before positioning for firm near-term direction ahead of this week’s key US macro releases.

    Wednesday’s US economic docket features the ADP report on private-sector employment, the Advance Q1 GDP print, and the Personal Consumption and Expenditure (PCE) Price Index. The focus will then shift to the closely-watched US Nonfarm Payrolls (NFP) on Friday, which may provide insight into the Federal Reserve’s (Fed) policy outlook. This, in turn, will play a crucial role in influencing the near-term USD price dynamics and provide some meaningful impetus to the NZD/USD pair.

    Economic Indicator

    NBS Manufacturing PMI

    The NBS Manufacturing Purchasing Managers Index (PMI), released by the China Federation of Logistics & Purchasing (CFLP) and China’s National Bureau of Statistics (NBS), is a leading indicator gauging business activity in China’s manufacturing sector. The data is derived from surveys of senior executives at manufacturing companies. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the Renminbi (CNY). Meanwhile, a reading below 50 signals that activity among goods producers is generally declining, which is seen as bearish for CNY.


    Read more.



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  • New Zealand’s RBNZ set to trim interest rate for fifth meeting in a row

    New Zealand’s RBNZ set to trim interest rate for fifth meeting in a row


    • The Reserve Bank of New Zealand is set to lower the interest rate by 25 bps to 3.5% on Wednesday.
    • In February, the RBNZ left the door open for further cuts, anticipating the negative impact of US tariffs.
    • The New Zealand Dollar could experience intense volatility following the RBNZ’s policy announcements.

    The Reserve Bank of New Zealand (RBNZ) is on track to deliver a 25 basis point (bps) cut to the Official Cash Rate (OCR), bringing down the key policy rate from 3.75% to 3.50% following its April monetary policy meeting on Wednesday. The decision is fully priced in and will be announced at 02:00 GMT.

    Therefore, the language in the RBNZ’s policy statement will be closely scrutinized for fresh insights on future rate cuts, which could significantly impact the performance of the New Zealand Dollar (NZD).

    What to expect from the RBNZ interest rate decision?       

    The RBNZ has already cut by 175 basis points since August last year, with the former Governor Adrian Orr having left the door open for rate cuts in April and May while addressing his post-policy meeting press conference in February.

    At its February meeting, the central bank said that “there is a risk of increased trade barriers and broader geoeconomic fragmentation,” adding that “an increase in trade restrictions is likely to reduce economic activity in New Zealand.”

    Earlier this month, United States (US) President Donald Trump announced his long-awaited reciprocal tariffs, with China hit by additional 34% levies while New Zealand faces 10% tariffs. The Pacific Nation said it will not retaliate. China leads the US as New Zealand’s top export market.

    Although the direct impact of US tariffs on New Zealand’s economy is likely to be limited, the tariffs will probably lower growth in the country’s main trading partners, including Australia and China, eventually acting as a headwind to the South Pacific Island nation.

    The gloomier outlook on global growth could prompt the bank to retain its easing bias, with markets now expecting the OCR to bottom out at 2.75%, compared to 3% a week ago.

    How will the RBNZ interest rate decision impact the New Zealand Dollar?

    The NZD/USD pair is recovering from five-year troughs near 0.5500 in the run-up to the RBNZ showdown.

    The short-covering or profit-booking rally in the pair could gather steam following the RBNZ’s expected 25 bps rate decision.

    The Kiwi Dollar could built on its recent recovery if the RBNZ warns of higher inflation due to tariffs, sounding cautious on the scope of future rate cuts.

    However, amidst escalating US-China trade war and the associated risks to New Zealand’s economy, should the RBNZ surprise with a 50 bps rate cut, the New Zealand Dollar (NZD) will likely crumble against the US Dollar (USD). 

    “The NZD/USD pair remains exposed to downside risks as the 14-day Relative Strength Index (RSI) remains well below the 50 level, despite the latest uptick. If the downtrend resumes, the initial support is at the five-year low of 0.5506, below which the March 2020 low of 0.5470 will be targeted. If the selling pressure intensifies, the last line of defense for buyers is seen at the 0.5450 psychological level.”

    Any recovery attempt in the pair will require acceptance above the critical confluence resistance around the 0.5700 region, where the 21-day Simple Moving Average (SMA), the 50-day SMA, and the 100-day SMA converge. Further up, the April 4 high of 0.5803 will be tested en route to the 200-day SMA at 0.5894,” Dhwani adds.  

    New Zealand Dollar PRICE This month

    The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies this month. New Zealand Dollar was the weakest against the Swiss Franc.

    USD EUR GBP JPY CAD AUD NZD CHF
    USD -1.21% 1.23% -1.77% -1.47% 3.06% 1.43% -2.82%
    EUR 1.21% 2.41% -0.58% -0.32% 4.26% 2.62% -1.67%
    GBP -1.23% -2.41% -2.95% -2.67% 1.79% 0.18% -4.00%
    JPY 1.77% 0.58% 2.95% 0.30% 4.91% 3.23% -1.06%
    CAD 1.47% 0.32% 2.67% -0.30% 4.59% 2.95% -1.37%
    AUD -3.06% -4.26% -1.79% -4.91% -4.59% -1.57% -5.70%
    NZD -1.43% -2.62% -0.18% -3.23% -2.95% 1.57% -4.19%
    CHF 2.82% 1.67% 4.00% 1.06% 1.37% 5.70% 4.19%

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).

    New Zealand Dollar FAQs

    The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.

    The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.

    Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.

    The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.



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  • Kiwi plunges below 0.5600 as sellers extend their grip

    Kiwi plunges below 0.5600 as sellers extend their grip


    • NZD/USD fell sharply toward the 0.5600 zone on Friday, tracking heavy daily losses ahead of the Asian session.
    • Momentum indicators align bearishly, with MACD and Bull Bear Power showing clear selling pressure.
    • Major moving averages and resistance near 0.5700 cap upside attempts for now.

    The NZD/USD pair collapsed on Friday, diving toward the 0.5600 area as bearish momentum dominated the session. The pair traded deep in the red, shedding over 3% on the day and remaining mid-range between recent extremes at 0.5551 and 0.5798. Sellers stayed firmly in control through the day, with technical indicators confirming the downturn. The action unfolds during Friday’s session ahead of the Asian opening.

    Daily chart

    Technicals suggest a clear downside bias. The Moving Average Convergence Divergence (MACD) and Bull Bear Power indicator both print sell signals, amplifying bearish sentiment. While the Relative Strength Index (RSI) at 37.21 flirts with oversold territory.

    Moving averages reinforce the bearish tone across the board. The 10-day Exponential Moving Average (EMA) at 0.57105 and 10-day Simple Moving Average (SMA) at 0.57148 are both aligned lower. Longer-term indicators, including the 20-day SMA at 0.57342, the 100-day at 0.57177, and the 200-day at 0.59039, confirm an extended period of selling pressure.



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  • NZD/USD extends upside above 0.6000 on weaker US data

    NZD/USD Price Forecast: Rallies to near 0.5750


    • NZD/USD jumps to near 0.5750 as antipodeans outperform ahead of Trump’s tariff announcement.
    • Donald Trump is expected to announce massive tariff measures for China.
    • Trump’s tariffs will be bad for the global economy, including the US.

    The NZD/USD pair advances to near 0.5745 during European trading hours on Wednesday. The Kiwi pair strengthens as antipodeans are outperforming their peers despite firm expectations that they will have collateral damage from reciprocal tariffs by the United States (US) that will be announced by President Donald Trump later in the day.

    New Zealand Dollar PRICE Today

    The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the strongest against the Canadian Dollar.

      USD EUR GBP JPY CAD AUD NZD CHF
    USD   -0.09% -0.16% -0.15% 0.08% -0.49% -0.76% 0.05%
    EUR 0.09%   -0.04% -0.06% 0.19% -0.38% -0.68% 0.16%
    GBP 0.16% 0.04%   0.02% 0.23% -0.33% -0.61% 0.20%
    JPY 0.15% 0.06% -0.02%   0.21% -0.37% -0.65% 0.17%
    CAD -0.08% -0.19% -0.23% -0.21%   -0.57% -0.83% -0.03%
    AUD 0.49% 0.38% 0.33% 0.37% 0.57%   -0.28% 0.53%
    NZD 0.76% 0.68% 0.61% 0.65% 0.83% 0.28%   0.82%
    CHF -0.05% -0.16% -0.20% -0.17% 0.03% -0.53% -0.82%  

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).

    Market participants expect Trump to slap hefty tariffs on China in addition to 20% levies, applied since his return to the White House. Higher import duties on China will weaken its economic outlook, given that China is the largest trading partner of the US.

    The impact of Trump’s tariff will be indirect on the New Zealand Dollar (NZD), given that the kiw economy relies significantly on its exports to the US.

    Meanwhile, the US Dollar (USD) trades cautiously ahead of Trump’s tariff announcement. Investors expect that the new suite of tariffs by Trump will also impact the US economic growth and bring a resurgence in inflationary pressures in the near term.

    NZD/USD trades inside the Ascending Triangle chart pattern formation on the daily timeframe, suggesting indecisiveness among market participants. The flat border of the above-mentioned chart pattern is plotted from the January 24 high of 0.5795, while the upward-sloping border is placed from the February low of 0.5516.

    The 20-day Exponential Moving Average (EMA) wobbles near the pair around 0.5725, which indicates a sideways trend.

    The 14-day Relative Strength Index (RSI) oscillates inside the 40.00-60.00, which indicates a volatility contraction.

    An upside move would appear if the asset breaks the March high of 0.5832, which will drive it towards the round-level resistance of 0.5900 and the November 29 high of 0.5930.

    On the flip side, the Kiwi pair could revisit the 13-year low of 0.5470 and decline further to near the round-level support of 0.5400 if it breaks below the February low of 0.5516.

    NZD/USD daily chart

    US-China Trade War FAQs

    Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.

    An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.

    The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.

     



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  • NZD/USD remains stronger near 0.5900 as US Dollar struggles ahead of key economic data

    NZD/USD advances to fresh weekly top, around 0.5720-0.5725 region


    • A combination of supporting factors pushes NZD/USD higher for the second straight day.
    • A positive risk tone and Fed rate cut bets undermine the USD, lending support to the pair.
    • The upside seems limited as traders keenly await Trump’s reciprocal tariffs announcement.

    The NZD/USD pair gains strong follow-through positive traction for the second straight day and climbs to a fresh weekly high, around the 0.5720-0.5725 region during the Asian session on Wednesday. 

    A generally positive tone around the equity markets, along with the optimism over China’s economy, turns out to be key factors benefiting antipodean currencies, including the New Zealand Dollar (NZD). Data released on Tuesday showed that China’s manufacturing activity expanded at its fastest pace in a year during March. This comes on top of China’s better-than-expected official PMIs on Monday and the recent stimulus measures to prop up economic recovery, which, along with subdued US Dollar (USD) price action, act as a tailwind for the NZD/USD pair. 

    Investors now seem convinced that a tariff-driven slowdown in US economic growth might force the Federal Reserve (Fed) to resume its rate-cutting cycle soon and are pricing in the possibility of 80-basis-points rate cuts by the end of this year. Apart from this, a stable performance around the Asian equity markets fails to assist the safe-haven USD to attract any meaningful buyers. That said, concerns over US President Donald Trump’s planned reciprocal tariffs announcement on Wednesday might hold back traders from placing bullish bets around the export-reliant NZD.

    Furthermore, expectations that the Reserve Bank of New Zealand (RBNZ) would lower borrowing costs at least two times by the year-end might contribute to capping the NZD/USD pair. Adding to this, Monday’s breakdown below a one-week-old trading range warrants some caution before positioning for any further gains. Traders now look forward to the release of the US ADP report on private-sector employment for some impetus later during the early North American session, though the focus will remain glued to Trump’s so-called reciprocal tariffs announcement.

    Tariffs FAQs

    Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

    Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

    There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

    During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.

     



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  • NZD/USD holds positive ground near 0.5900 as New Zealand Retail Sales beat expectations

    NZD/USD extends gains to near 0.5750 amid improved risk sentiment, China stimulus hopes


    • NZD/USD appreciates as sentiment improves following S&P Global Ratings’ projection that New Zealand will be less affected by US tariffs.
    • Bullish momentum persists in New Zealand equities, driven by signs of domestic recovery after country exited recession in Q4 2024.
    • Federal Reserve Governor Adriana Kugler reaffirmed that the Fed’s interest rate policy remains restrictive and appropriately positioned.

    NZD/USD continues its upward momentum for the second consecutive day, trading around 0.5740 during Asian hours on Wednesday. The pair strengthens as the New Zealand Dollar (NZD) gains traction, supported by improved trader sentiment after S&P Global Ratings projected that New Zealand and several regional economies would be less affected by US tariffs.

    Additionally, optimism surrounding potential US tariff exemptions provided some relief to the export-driven NZD. However, uncertainty remains as US President Trump reportedly considers three escalating tariff levels, though some sources suggest this tiered approach is not officially under discussion.

    Further bolstering NZD, bullish momentum in New Zealand equities continues following signs of domestic recovery after the country exited the recession in Q4 2024. Government data released last week showed GDP grew 0.7% in the December quarter, surpassing analysts’ forecasts of 0.4% and the central bank’s 0.3% projection.

    The NZD could also find support from anticipated Chinese stimulus measures aimed at boosting consumption. China’s Communist Party and State Council have proposed initiatives to “vigorously boost consumption” by increasing wages and easing financial burdens, an effort that could benefit New Zealand exports given China’s role as a key trade partner.

    However, the Kiwi Dollar may struggle due to expectations of further monetary easing from the Reserve Bank of New Zealand (RBNZ). In its February meeting, the central bank signaled two 25-basis-point (bps) rate cuts in April and May, with a potential third later in the year.

    Despite NZD strength, the upside for NZD/USD could be limited as the US Dollar (USD) finds support from hawkish remarks by Federal Reserve Governor Adriana Kugler. On Tuesday, Kugler emphasized that the Fed’s interest rate policy remains restrictive and well-positioned. Kugler also noted that progress toward the 2% inflation target has slowed since last summer and described the recent rise in goods inflation as “unhelpful.”

    New Zealand Dollar FAQs

    The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.

    The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.

    Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.

    The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.

     



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  • Kiwi plunges below 0.5600 as sellers extend their grip

    NZD/USD extends downside below 0.5750 as US tariffs loom


    • NZD/USD weakens to near 0.5725 in Tuesday’s early Asian session. 
    • Trump’s tariff policies and expectations of further RBNZ rate cuts continue to undermine the Kiwi. 
    • China’s stimulus measures might cap the downside for the pair. 

    The NZD/USD pair extends the decline to around 0.5725 during the early Asian session on Tuesday. The New Zealand Dollar (NZD) softens to a one-week low amid concerns over the looming April 2 deadline for US reciprocal tariffs.

    Trump said late Monday that he will announce tariffs on automobile imports in the coming days and indicated that some countries will receive breaks from reciprocal tariffs on April 2. Trump signaled there could be “flexibility” in the tariff plans and some trading partners would receive possible exemptions or reductions. However, the confusion about Trump’s plans for the tariff announcement scheduled for April 2 could weigh on the Kiwi against the US Dollar (USD). 

    Economists expect the Reserve Bank of New Zealand (RBNZ) to deliver further rate cuts to the Official Cash Rate (OCR) at each of the next meetings despite the GDP report last week surprising to the upside. “So far, the inflation outlook remains comfortable for the RBNZ. Two 25bp cuts over April and May remain highly certain,” said ASB chief economist Nick Tuffley.

    Meanwhile, a fresh Chinese stimulus measure might help limit the NZD’s losses, given China’s key role as New Zealand’s major trading partner. The ruling Chinese Communist Party’s (CCP) central committee and state council announced ambitious plans to “vigorously boost consumption” by putting up pay and reducing financial burdens in its latest attempt to increase consumer confidence and lift its struggling economy.  

    New Zealand Dollar FAQs

    The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.

    The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.

    Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.

    The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.

     



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  • NZD/USD extends its upside to near 0.5750, eyes on US PPI release

    NZD/USD extends its upside to near 0.5750, eyes on US PPI release


    • NZD/USD gains traction to around 0.5740 in Thursday’s early Asian session. 
    • Trump’s unpredictable announcements on tariffs undermine the US Dollar. 
    • China’s deflationary pressures might cap the upside for China-proxy Kiwi. 

    The NZD/USD pair extends its upside to around 0.5740 during the early Asian session on Thursday, bolstered by the weaker US Dollar (USD). The US Producer Price Index (PPI) will be the highlight later on Thursday, followed by the weekly Initial Jobless Claims.

    Worries over US President Donald Trump’s unpredictable trade policies have spread uncertainty among investors, weighing on the Greenback. Investors are worried about US weaker economic data as well as big cuts to the government workforce and government spending. Goldman Sachs analysts last week raised its recession chance from 15% to 20%, citing it saw policy changes as the key risk to the economy. 

    On the other hand, concerns over persistent deflationary pressures in China, New Zealand’s biggest export market, undermine the Kiwi. China’s Consumer Price Index (CPI) in February missed expectations and fell at the sharpest pace in 13 months, while producer price deflation persisted. 

    “China’s economy still faces deflationary pressure. While sentiment was improved by the developments in the technology space, domestic demand remains weak,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management.

    New Zealand Dollar FAQs

    The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.

    The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.

    Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.

    The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.

     



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  • Kiwi plunges below 0.5600 as sellers extend their grip

    Has a chance to decline further – UOB Group


    New Zealand Dollar (NZD) could decline further vs US Dollar (USD), but it does seem to have enough momentum to break and remain below 0.5680. In the longer run, if NZD breaks and remains below 0.5680, it could trigger a decline to 0.5645, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

    NZD can decline towards 0.5645

    24-HOUR VIEW: “Our view for NZD to ‘trade in a range of 0.5715/0.5755 range’ yesterday was incorrect. Instead of trading in a range, NZD fell to 0.5689. Today, NZD could decline further, but it does not seem to have enough momentum to break and remain below 0.5680. The major support at 0.5645 is highly unlikely to come into view. On the upside, resistance levels are at 0.5715 and 0.5735.”

    1-3 WEEKS VIEW: “We highlighted two days ago (25 Feb, spot at 0.5735) that ‘the current price movements are part of a 0.5680/0.5780 range.’ Yesterday, NZD fell to a low of 0.5689, closing at 0.5697, lower by 0.39%. Downward momentum is beginning to build, and if NZD breaks and remains below 0.5680, it could trigger a decline to 0.5645. To sustain the buildup in momentum, NZD must not break above 0.5755.”



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