Forex Trading Tools and Services

Currencies NZD/USD

NZD/USD Moves Above 0.6000 Despite Rate Cut Speculation as US Dollar Lags Due to Debt Fears

  • BY
  • May 26, 2025
  • 0 Comments

NZD/USD currency pair jumped above 0.6000, hitting new six-month highs around 0.6030 in Asian trading on Monday, even as rate cut speculation by the Reserve Bank of New Zealand (RBNZ) picks up. The New Zealand dollar strength is being witnessed against the backdrop of ongoing US Dollar weakness due to increasing concerns over the US fiscal deficit. The Congressional Budget Office (CBO) cautioned that the “One Big Beautiful Bill” proposed by former President Trump would increase the deficit by $3.8 billion via tax loopholes, putting additional pressure on US bond yields and economic prospects. Half of NZIER’s Shadow Board members meanwhile suggest a 25 basis-point OCR cut in the next RBNZ decision, mirroring the nation’s lackluster inflation and weak growth. KEY LOOKOUTS •Markets are keenly observing if the RBNZ will act on NZIER’s suggestion of $25 basis-point rate cut in view of low inflation and sluggish economic growth. •The fate of Trump’s “One Big Beautiful Bill” in the Senate might have a big bearing on the US Dollar, particularly if the estimated $3.8 billion increase in the deficit comes to pass. •Itching US bond yields could continue to prop up borrowing costs, heightening economic uncertainty and affecting currency flows. •Sustained weakness in the US Dollar, underpinned by debt issues, could assist NZD/USD in the near term, particularly if risk appetite remains positive. Investors will need to watch the Reserve Bank of New Zealand’s (RBNZ) Monetary Policy announcement on Wednesday closely, as markets expect a potential 25 basis-point rate reduction in the face of muted inflation and slow growth. Meanwhile, events in regard to ex-President Trump’s suggested “One Big Beautiful Bill” could continue to take a toll on the US Dollar, particularly if the projected $3.8 billion rise in the fiscal deficit actually happens. Increasing US bond yields, driven by deficit worries, may also maintain pressure on the US economy by perpetuating elevated borrowing costs. In summary, NZD/USD is still responsive to changes in monetary policy expectations and investor sentiment risk, which will be major drivers in the near term. The markets are waiting for the RBNZ’s rate decision, with a majority of people expecting a 25 basis-point reduction with dismal growth. In the meantime, US Dollar weakness is sustained by Trump’s proposed bill due to raised deficit concerns, keeping NZD/USD underpinned at six-month highs. •  NZD/USD broke the 0.6000 barrier, reaching a six-month high of about 0.6030 during Asian trading on Monday. •  The New Zealand Dollar firmed even as speculation for an RBNZ rate reduction this week increased. •  Fifty percent of NZIER’s Shadow Board suggested a 25 basis-point cut in OCR, while others proposed a bigger cut or no change. • US Dollar weakness persists amid increasing fears about the US fiscal deficit and economic prospects. • Trump’s suggested “One Big Beautiful Bill” would cost the US $3.8 billion in additional deficit, predicts the Congressional Budget Office (CBO). • Higher US bond yields fueled by deficit worries may prolong high borrowing costs, injecting economic uncertainty. • Short-term market sentiment continues to favor NZD/USD as investors wait for significant monetary policy announcements. New Zealand Dollar continues to strengthen with the Reserve Bank of New Zealand’s (RBNZ) forthcoming monetary policy announcement pending. Though certain members of NZIER’s Shadow Board have suggested a rate cut, broader market sentiment and external influences continue to support the NZD. The RBNZ has a difficult call to make as it weighs low inflation with persisting fears of the nation’s lackluster economic growth. While a cut in the rate is an option, the central bank can also opt to stay on the sidelines amid worldwide uncertainties. NZD/USD DAILY PRICE CHART CHART SOURCE: TradingView Meanwhile, the US Dollar comes under pressure as worries over the nation’s expanding fiscal deficit grow. And former President Donald Trump’s suggested “One Big Beautiful Bill” has come under scrutiny, with the Congressional Budget Office estimating it would increase the national deficit by $3.8 billion. The bill, which contains tax reductions for tipped employees and automobile purchasers, has raised concerns about long-term budgetary pressure. These events are creating uncertainty in US economic prospects, which is affecting global currency flows and favoring stronger performance from such currencies as the NZD. TECHNICAL ANALYSIS NZD/USD has pierced the important psychological resistance level of 0.6000, which points to positive momentum. The pair is around 0.6030, its highest in six months, which suggests ongoing buying interest. If this rally continues, the next resistance area could be around 0.6060–0.6080. On the negative side, there is immediate support at 0.5970, with further support at 0.5930. Momentum oscillators like RSI are still in bullish territory, which confirms the optimistic short-term view unless there is a drastic reversal in sentiment after the policy decision by the RBNZ. FORECAST If the Reserve Bank of New Zealand takes a cautious tone or postpones a cut in rates, then the NZD can continue with its bullish trend, taking NZD/USD higher. Further fall in the US Dollar, fueled by fiscal uncertainty and deteriorating sentiment surrounding the US economy, can also help the pair to gain further. If these conditions continue, the pair may test resistance levels around 0.6060 and even move towards 0.6100 in the near future. Improved market sentiment or better-than-expected New Zealand economic data would help the bullish argument further. Conversely, if the RBNZ announces a bigger-than-expected rate cut of more than 25 basis points or a more dovish easing tone, the NZD can become vulnerable. A reversal in the US Dollar, perhaps on the back of better risk appetite or better US economic readings, can also negatively impact the pair. In that case, NZD/USD may come under bear pressure, with early support around 0.5970 and further decline potentially pushing it towards 0.5930 or below. Traders need to keep an eye on changes in global risk sentiment, which has the potential to change the pair’s direction in no time.

Read More
Currencies NZD/USD

NZD/USD Fights Below 0.5900 As PBoC Cuts Rate, US Credit Downgraded

  • BY
  • May 20, 2025
  • 0 Comments

NZD/USD currency pair continues to face pressure at the 0.5900 level after the People’s Bank of China (PBoC) lowered its one-year Loan Prime Rate by 0.10 percentage point to 3.00% from 3.10%, a move that dented the New Zealand Dollar because of China’s close economic relationship with the latter. While blended Chinese data contributed to market volatility, New Zealand Q1 data revealed the steepest increase in producer prices in close to three years, fueling inflation fears. In contrast, the US Dollar softened following Moody’s downgrade of the US credit rating from Aaa to Aa1 due to increasing federal debt and fiscal difficulties. Market players now look forward to the Reserve Bank of Australia’s rate decision later today. KEY LOOKOUTS •  Ongoing market response to the PBoC’s reduction of the Loan Prime Rate and how that affects demand for the New Zealand Dollar, considering the nations’ robust trade relationship. • Look out for news or commentary on domestic inflation, particularly after Q1’s steep increase in producer input and output prices, which may be affecting RBNZ policy expectations. • Market sentiment may change considerably on the Reserve Bank of Australia’s future interest rate decision and guidance, affecting overall risk sentiment and AUD-cross flows. • Keep track of the market’s continuous reaction to Moody’s US credit rating downgrade and how it influences USD strength, Treasury yields, and overall risk appetite. Markets are watching carefully various factors that are affecting the NZD/USD pair. The People’s Bank of China’s recent rate cut still dents the New Zealand Dollar, evidencing the tight trade nexus between the two countries. Locally, New Zealand’s Q1 producer price surge has concerned observers with a possible resurgence in inflation pressures, which would have implications for monetary policy in the future. Also on the radar is the Reserve Bank of Australia’s decision next week, with a likely cut anticipated even with solid employment figures. The US Dollar, on the other hand, is under pressure after Moody’s downgrade of its credit rating, triggering wider fears about American fiscal stability. NZD/USD is under pressure with China’s rate cut and New Zealand’s renewed inflationary fears. Traders are also awaiting the RBA’s rate decision and the weakening of the US Dollar after Moody’s credit downgrade. • NZD/USD is trading close to 0.5900, still subdued after the PBoC reduced its one-year Loan Prime Rate to 3.00%. •  China policy relaxation puts the New Zealand Dollar under pressure as both nations have robust trade links. • Chinese economic data is mixed, with stronger-than-expected industrial production but soft retail sales. •  New Zealand’s Q1 statistics revealed the steepest increase in producer input and output prices in almost three years, triggering inflation fears. •  Market focus turns to the RBA, due to be cutting interest rates by 25 basis points even after solid jobs data. •  The US Dollar falls after Moody’s lowered the US credit rating to Aa1 from Aaa, citing increased debt and fiscal issues. •  Broad risk sentiment remains delicate in the face of global rate policy divergence and fiscal policy uncertainty in large economies. New Zealand Dollar continues to be pressured by developments in the global economy, which continue to influence the sentiment of investors. The recent move by China to reduce its one-year Loan Prime Rate is indicative of persistent efforts to spur its economy, which has been reporting mixed signals with higher industrial output but lower retail sales. With New Zealand having a strong trade connection with China, these policy actions always have a major influence on the NZD. And at the same time, domestic inflation worries are re-emerging with the latest figures indicating a significant increase in producer prices—highlighting possible cost pressures within the economy. NZD/USD DAILY PRICE CHART CHART SOURCE: TradingView And the general market is absorbing Moody’s downgrade of the credit rating of the United States, a step that mirrors increasing concern about long-term fiscal sustainability. This move, coupled with projections of increasing debt and expanding deficits, has made markets wary globally. The Reserve Bank of Australia’s rate decision is now catching investors’ attention, with expectations of an indication on how another major regional economy is coping with changing economic conditions. All these events as a whole shape market sentiment and could direct monetary policy expectations in the weeks to come. TECHNICAL ANALYSIS NZD/USD is finding it difficult to make a strong move up from the 0.5920 level, indicating sustained resistance at this point. The pair is still trading below major moving averages on the daily chart, signifying a bearish short-term bias. In case of sustained downward pressure, support may be tested in the 0.5860–0.5880 region. In the up direction, a sustained move above 0.5950 would be necessary to show signs of a change in momentum. Technical levels like RSI are still neutral to slightly bearish, mirroring the pair’s guarded tone in the face of general market uncertainty. FORECAST Should market sentiment recover and global risk appetite improve, NZD/USD may recover towards the 0.5950–0.5980 resistance level. Upside surprises in New Zealand’s economic reports, for instance, stronger growth or contained inflation, can also help the Kiwi. In addition, any stabilization or improvement in China’s economy would improve New Zealand’s export prospects and spur bullish pressure in the NZD. A weaker US Dollar due to fears of fiscal health or poor economic data could also further contribute towards an upside move. On the negative side, NZD/USD could see renewed selling pressure if risk appetite weakens or Chinese economic data continues to weaken. A firmer US Dollar, fueled by safe-haven buying or hawkish rhetoric from the Federal Reserve, might send the pair down to the 0.5860 support level or lower. Locally, if New Zealand inflation pressures prompt worries about weakening demand or if the Reserve Bank is prudent, the Kiwi might stay on the back foot. Geopolitical tensions or global growth worries might also cap upside potential and predispose towards downside risks.

Read More
Currencies NZD/USD

NZD/USD Jumps Higher than 0.5750 as China’s Economic Data Increases Market Optimism and Weakening USD

  • BY
  • March 17, 2025
  • 0 Comments

The pair NZD/USD moved higher than the 0.5750 level, picking up strength for a second day in a row after the publication of strong economic data from China. Retail Sales in China increased by 4.0% year-on-year in January-February, and Industrial Production grew by 5.9%, both showing enhanced economic activity and improving market optimism in the Asia-Pacific economy. Since China is still one of New Zealand’s most important trading partners, these encouraging signs supported the Kiwi. Further optimism was provided by China’s recently launched consumption stimulus plan. The US Dollar, on the other hand, lost strength as the University of Michigan’s Consumer Sentiment Index plummeted sharply, further supporting NZD/USD’s bullish trend. KEY LOOKOUTS • Greater-than-anticipated Retail Sales and Industrial Production in China increase NZD sentiment, supporting optimism in Asia-Pacific market dynamics. • A precipitous decline in the Michigan Consumer Sentiment Index presses the US Dollar, providing support to NZD/USD advances. • China’s special action plan to promote consumption, wages, and real estate sentiment favors regional currencies, including NZD over USD. • Weakness in New Zealand’s Performance of Services Index is a domestic signal, and if global sentiment reverses, this could restrict NZD’s rally. The NZD/USD currency pair continues to strengthen with the support of positive Chinese economic data and a soft US Dollar. China’s Retail Sales increased by 4.0% and Industrial Production grew 5.9% in January-February, which indicates good economic momentum and raises investor sentiment in the Asia-Pacific region. The New Zealand Dollar also gained from China’s new stimulus package that was created to boost domestic consumption, pay, as well as stabilize markets. On the other hand, the US Dollar remained on the back foot after a steep fall in the University of Michigan’s Consumer Sentiment Index to its weakest level since November 2022. In spite of a decline in New Zealand’s services sector, the favorable external environment remains in support of NZD/USD’s rise. NZD/USD climbs above 0.5750, led by robust Chinese economic data and a softer US Dollar. The pair’s upside is also supported by China’s new consumption stimulus plan. Even with domestic service sector softness, the pair continues to rally. • NZD/USD climbed above 0.5750, marking the second straight day of gains on improved sentiment. • China’s Retail Sales grew 4.0% YoY in January-February, from 3.7% in December, supporting regional currencies such as the NZD. • Chinese Industrial Production grew 5.9% YoY, better than expected, and indicating economic prowess. • China rolled out a special consumption stimulus plan, comprising wage increases and efforts to enhance household expenditure and stabilize core markets. • PSI in New Zealand fell to 49.1, indicating services sector contraction that may drag on domestic economic prospects. • US Dollar declined strongly, after a fall in the University of Michigan Consumer Sentiment Index to 57.9, the lowest level since November 2022. • The attention now shifts to US Retail Sales data that may drive the next direction for NZD/USD. China’s recent economic statistics have sent a wave of optimism into the market, particularly favoring the New Zealand Dollar. The increase in Retail Sales and Industrial Production between the months of January-February indicates firmer consumer spending and industrial performance, which supports China’s economic growth. Since China is one of New Zealand’s major trading partners, any good news in its economy will prove favorable to the New Zealand Dollar. In addition, China’s declaration of a special action plan to spur domestic consumption—via wage rises, support for household spending, and market stabilization efforts—has also boosted sentiment throughout the region. NZD/USD Daily Price Chart Chart Source: TradingView Concurrently, the US Dollar is under pressure from declining consumer confidence in the United States. The steep drop in the University of Michigan Consumer Sentiment Index reflects increasing worry about the outlook for the US economy, and this is having an impact on investor sentiment. Although New Zealand’s own service sector has reported signs of slowing, overall market sentiment remains biased towards the Kiwi, owing primarily to superior external drivers. With global markets waiting closely for subsequent economic releases, the overall economic climate remains in the driver’s seat in dictating currency fluctuations. TECHNICAL ANALYSIS NZD/USD is displaying the signs of ongoing bullish strength following the break through the 0.5750 resistance level. The pair remains firm around 0.5760, reflecting buyer demand at higher prices. If the pair holds above this range, it may challenge the next resistance zone of 0.5785–0.5800. On the negative side, support is close to 0.5720, and then a stronger support area around 0.5680. A break below these could mean a loss of momentum. On the whole, the current price action indicates a positive sentiment with the pair remaining in a short-term bullish bias. FORECAST NZD/USD may experience further gains in the short term. Positive economic news from China and the stimulus packages to stimulate consumption are expected to continue supporting the New Zealand Dollar. A break above the 0.5760 level may pave the way towards the next resistance levels at 0.5785 and 0.5800. If the bullish momentum continues, the pair may even try to reach the 0.5820 level, particularly if future US economic data continues to be weak. On the other hand, any change in market mood or disappointing economic news from the rest of the world may initiate a pullback in NZD/USD. In case the pair is unable to stay above 0.5750, it might initially be supported around 0.5720. Breaking below this point might initiate a more serious correction towards 0.5680 or even 0.5650. Moreover, if New Zealand’s economic indicators in the domestic market continue to reflect weakness, it may cap the upside and risk a move down.

Read More
Currencies NZD/USD

NZD/USD Falls Close to 0.5700 as China’s Deflationary Pressures Hit Kiwi Sentiment

  • BY
  • March 10, 2025
  • 0 Comments

The NZD/USD currency pair fell close to the 0.5700 level in Monday’s Asian session, weighed down by worsening deflationary pressures in China. China’s Consumer Price Index (CPI) in February fell 0.7% year-over-year, the steepest decline since January 2024, fueling concerns over soft domestic demand in the world’s second-largest economy—New Zealand’s major trading partner. This has taken a heavy toll on the Kiwi. Yet, pair downside momentum can be curtailed by rising expectations of US interest rate cuts in light of weaker-than-expected Nonfarm Payrolls. The market waits now for Tuesday’s US CPI release for further cues on Fed policy and overall market direction. KEY LOOKOUTS • China’s sharper-than-expected decline in CPI signals weak domestic demand, adding pressure on the Kiwi from the strong trade links with China. • Markets await Tuesday’s US CPI data, which may impact Federal Reserve rate expectations and set the tone for NZD/USD action. • Soft US jobs data stokes rate cut speculation, which may cap USD strength and underpin a small NZD/USD rally. • International risk sentiment and geopolitics could affect safe-haven demand for USD, influencing near-term volatility in NZD/USD trading. The NZD/USD currency pair continues to be under pressure, trading close to the 0.5700 level in the wake of increasing deflationary pressures in China, New Zealand’s biggest trading partner. China’s CPI fall in February indicates poor consumer demand and puts additional bearish pressure on the Kiwi. Downside in the pair, however, may be capped as weaker US Nonfarm Payrolls data has reinforced expectations of future interest rate cuts by the Federal Reserve. Investors now look to Tuesday’s US CPI report, which will be instrumental in determining market sentiment and the short-term direction of the NZD/USD pair. NZD/USD hovers around 0.5700, weighed down by China’s worsening deflation and poor domestic demand. Downside is capped by weaker US jobs data, which enhances Fed rate cut hopes. All eyes now on Tuesday’s US CPI data for new direction. • NZD/USD quotes at 0.5700, weighed down by China’s emerging deflationary pressures. • China’s CPI dropped 0.7% in February, the largest fall since January 2024, indicating soft domestic demand. • New Zealand Dollar falls, as China is one of its key trading partners and economic slowdown dents Kiwi mood. • Soft US Nonfarm Payrolls data boosts expectations of several Fed interest rate cuts in 2024. • Fed policy direction continues to be prudent, with officials emphasizing caution and the requirement for data-driven decision-making. • US CPI releases on Tuesday are likely to be a major driver of the next direction in NZD/USD. • Market sentiment and global risk flows will continue to drive short-term currency pair movement. China’s increasing deflationary pressures have created new doubts about the strength of the world economy, particularly for nations such as New Zealand that enjoy strong trade relations with China. The steep drop in China’s Consumer Price Index (CPI) for February is an indicator of weak domestic consumption and weak household demand. As one of New Zealand’s largest export markets, any Chinese economic slowdown would tend to influence the Kiwi economy indirectly. Market players are becoming more cautious, observing how China’s domestic challenges may impact overall economic activity and global trade flows. NZD/USD Daily Price Chart Chart Source: TradingView Alternatively, the United States also has its own share of uncertainties, especially after the recent Nonfarm Payrolls reading indicated a moderation in job growth. This has promoted increasing speculation that the Federal Reserve will start cutting interest rates sooner rather than later. While policymakers have indicated a data-dependent policy, future economic indicators—particularly the US Consumer Price Index (CPI)—will have a crucial influence on forming expectations. These global macroeconomic trends are expected to drive investor sentiment and near-term policy choices in major economies. TECHNICAL ANALYSIS NZD/USD continues to come under bear pressure, trading near major support areas at the 0.5700 level. The pair has not been able to sustain buying momentum, reflecting that sellers still have the upper hand. A persistent break below this support level could pave the way for additional declines, but a bounce back above near-term resistance levels may reflect a potential change in mood. Traders will carefully observe price behavior around these major levels for reversal or breakout signals, particularly before high-impact economic releases such as the US CPI report. FORECAST If the coming economic data, specifically the US CPI, indicates softer inflation, this would reinforce expectations for Federal Reserve rate cuts and possibly weaken the US Dollar. This situation might present some upside potential for NZD/USD to recover to higher resistance levels. Moreover, any indication of policy stimulus or stabilization in China may enhance market sentiment for the Kiwi and present additional scope for recovery. Conversely, in the event that US inflation numbers turn higher than anticipated, this can temper expectations of premature rate reductions by the Fed, strengthening the US Dollar and putting additional pressure on NZD/USD. Additionally, ongoing deflationary indications and subdued Chinese domestic demand might further drain the New Zealand Dollar. In that scenario, the duo can find it difficult to stay above major support levels and might experience further falls in the near future.

Read More