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Currencies NZD/USD

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

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  • March 17, 2025
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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.

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Currencies GBP/USD

GBP/USD Tops Four-Month High as US Dollar Loses Ground to Cooling Inflation, Rising Economic Concerns

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  • March 13, 2025
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The GBP/USD rate hit a four-month high of 1.2989 on March 13 amid a sustained rise as the US Dollar comes under pressure following declining US inflation and increasing economic concerns. The recent decline in US inflation, combined with hopes of possible rate cuts by the Fed, has undermined the Greenback, lifting the British Pound. In the meantime, the UK economy is not without its problems, with falling housing prices and a muted outlook from the Bank of England. In spite of these issues, hopes for UK-US trade talks and hopes for persistently higher interest rates have supported the Pound. Investors are now looking to forthcoming US economic statistics and UK GDP data to further assess the prospects of both economies. KEY LOOKOUTS • Deterioration in US inflation is expected to raise hopes that the Federal Reserve will reduce interest rates earlier than expected, which will soften the US Dollar. • The GBP/USD pair continues to push higher, trading around 1.2960 as the US Dollar comes under pressure with rising fears of recession. •  The RICS Housing Price Balance dropped to 11% in February, signaling ongoing weakness in the UK housing market amid broader economic uncertainty. • Expectations of sustained high interest rates in the UK are supporting the Pound, as traders scale back earlier forecasts for aggressive easing by the BoE. The GBP/USD pair is holding steady near four-month highs, trading around 1.2960 as the US Dollar faces significant pressure. The recent dip in US inflation, with headline and core inflation slowing more than anticipated, has fueled speculation that the Federal Reserve will reduce interest rates in the near future, pressuring the Greenback. In contrast, the UK economy is struggling, led by a drop in house prices, but the British Pound is being cushioned by increased hopes that the Bank of England will keep higher interest rates in place for a longer time. With fears of a possible US recession and continued tariff uncertainty, the Pound is strengthening as investors await future economic data, such as the US Producer Price Index and UK GDP, for further market guidance. GBP/USD remains strong near four-month highs as the US Dollar weakens on cooling inflation, fueling expectations of Fed rate cuts. Meanwhile, the UK’s economic outlook faces pressure from a declining housing market, but optimism around sustained Bank of England rates supports the Pound. • The GBP/USD pair reached 1.2989 on March 13, maintaining strength amid a weaker US Dollar. • US February inflation data revealed a trend of cooling, with both headline and core inflation slowing more than anticipated, lowering the chances of additional rate hikes. • Expectations in markets are increasing that the Federal Reserve is likely to trim interest rates in the near future because of the downtrend in inflation and possible economic concerns. • The Greenback is also subjected to further headwinds as fears of a US recession persist, putting further pressure on the US Dollar. • The UK housing sector was weak, with the Residential Market Survey recording a second successive fall in the Housing Price Balance to 11% in February. • The UK 10-year gilt yield rose, indicating expectations that the Bank of England will keep higher interest rates for longer. • UK Prime Minister Keir Starmer was optimistic that the UK would not face US tariffs on steel and aluminum, which augured well for UK-US trade relations. The GBP/USD currency pair has been trending upwards, hitting a four-month high, indicating a positive sentiment for the British Pound. This change arrives as the US Dollar is increasingly under pressure, much of which stems from inflation and general economic concerns in the United States. As US inflation appeared to be easing, speculation grew that the Federal Reserve would soon decide to cut interest rates, which has further undermined the Greenback. In the meantime, the UK is working through its own economic woes, but the Pound is continuing to find favor, in part because it is expected that the Bank of England will maintain interest rates higher for longer. GBP/USD DAILY PRICE CHART CHART SOURCE: TradingView As the UK works through uncertainty in its housing market, where falling housing prices have been seen in recent months, there is cause for hope when it comes to trade with the US. UK Prime Minister Keir Starmer has shown faith that the nation would be spared tariffs on aluminum and steel via ongoing negotiations, which has allowed for a slightly more optimistic note in the market. As attention turns to pending economic data points, such as the UK GDP reports and more information regarding US inflation, prospects for both currencies remain tied to changing economic updates. TECHNICAL ANALYSIS GBP/USD has been in a strong bullish trend, closely following its four-month highs, with the pair repeatedly holding above the 1.2950 level. The recent escalation to 1.2989 indicates that the Pound is picking up pace, helped by the declining US Dollar. Important support is around 1.2900, while resistance is at 1.3000, where the pair is likely to encounter some consolidation before breaking higher. Indicators like the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicate bullish sentiment, although traders will watch closely for any pullbacks or overbought signals. As market players wait for new economic releases, these technical levels will be important in deciding the pair’s next direction. FORECAST The GBP/USD currency pair is expected to extend its bullish run, helped by a weakening US Dollar and expectation of the Federal Reserve to reduce interest rates in the immediate future. The Pound can continue to push towards the psychological 1.3000 resistance level if it holds its strength above crucial support levels, around 1.2950. The optimism in the market about the UK’s trade talks with the US and the Bank of England’s hardline on interest rates should give further support to the British currency. A move above 1.3000 would potentially lead to further advances, targeting the 1.3050 to 1.3100 region, if economic numbers out of the UK remain resilient. On the

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