The New Zealand Dollar (NZD) is showing strength in Tuesday’s early Asian session, supported by reduced expectations for a rate cut by the Reserve Bank of New Zealand (RBNZ) and signs of increased demand from China. The recent positive New Zealand employment report has reduced the likelihood of a rate cut, boosting the Kiwi. Additionally, improving Chinese demand is also contributing to the NZD’s gains, as China is a key trading partner for New Zealand.
However, geopolitical tensions in the Middle East could limit the downside for the NZD. The upcoming RBNZ rate decision and press conference will be closely watched, with a hawkish tone from Governor Adrian Orr potentially lifting the NZD against the US Dollar (USD) in the short term. Traders will also be monitoring US economic data releases, including the Producer Price Index (PPI), Consumer Price Index (CPI), and Retail Sales throughout the week.
Market Update: NZD Strengthens Ahead of RBNZ Decision
- ING analysts suggest a hold in August but potential rate cut in October, with easing bets expected to be trimmed by year-end.
- A majority of economists surveyed by Bloomberg expect the RBNZ to maintain its OCR at 5.5% on Wednesday.
- The NZIER Shadow Board is divided on the need for a rate cut, with some members advocating for a reduction due to economic weakness.
- The US PPI is forecasted to decrease in July, while traders are pricing in a 47.5% chance of a 50 bps rate cut by the Fed in September.
Technical Analysis: NZD/USD Outlook
The NZD/USD pair remains bearish on the daily chart, with the pair below the 100-day EMA. A break above the EMA could signal a resumption of the uptrend, with the RSI indicating a potential shift to a more bullish sentiment in the short term. Upside targets include 0.6050, 0.6082, and 0.6134, while downside support lies at 0.5912 and 0.5856.
US Dollar price today
The US Dollar (USD) has shown mixed performance against major currencies today, with the Australian Dollar leading in strength.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | -0.02% | -0.01% | -0.01% | -0.02% | -0.01% | -0.01% | 0.00% | |
| EUR | 0.01% | -0.01% | 0.00% | 0.01% | 0.00% | 0.00% | 0.01% | |
| GBP | 0.01% | 0.00% | 0.02% | -0.03% | 0.00% | -0.01% | 0.02% | |
| CAD | 0.00% | 0.00% | -0.01% | -0.01% | 0.00% | -0.04% | 0.01% | |
| AUD | 0.02% | -0.02% | -0.01% | 0.01% | 0.01% | -0.02% | 0.01% | |
| JPY | -0.07% | -0.02% | -0.02% | -0.02% | 0.00% | -0.02% | 0.03% | |
| NZD | -0.02% | 0.00% | 0.01% | 0.01% | 0.00% | 0.00% | 0.02% | |
| CHF | -0.01% | -0.02% | -0.02% | -0.03% | -0.03% | -0.01% | -0.04% |
The table displays the percentage change of the US Dollar against major currencies today, with the Australian Dollar showing the most strength.
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is influenced by the country’s economy, central bank policy, and external factors like Chinese demand and dairy prices. Strong Chinese economy and high dairy prices can boost the NZD, while weak economic data and low confidence can lead to depreciation.
The RBNZ aims for inflation between 1-3%, adjusting interest rates to achieve this goal. Rate differentials with the US Fed also impact the NZD/USD pair.
Macroeconomic data releases and economic indicators play a crucial role in evaluating the NZD’s value, with strong economic growth and low unemployment benefiting the currency.
The NZD tends to strengthen in risk-on periods and weaken during market turbulence, reflecting investor sentiment and market conditions.
Stay informed about the latest market updates and make informed decisions to manage your finances effectively. Understanding the factors influencing currency movements can help you navigate the volatile financial markets and optimize your investment strategies.