New Zealand Dollar declines to weekly low as USD holds firm ahead of FOMC Minutes
- NZD/USD attracts some follow-through selling for the second straight day on Wednesday.
- Inflation risks bolster US bond yields, underpinning the USD and weighing on spot prices.
- The RBNZ’s hawkish outlook could support the NZD as traders await the FOMC Minutes.
The NZD/USD pair is seen extending this week's retracement slide from the 0.5925 area, or the highest since June 3, and drifting lower for the second straight day on Wednesday. Spot prices dropped back closer to mid-0.5800s, hitting fresh weekly low during the Asian session amid a firmer US Dollar (USD) as the focus remains on the FOMC Minutes.
Investors will look for fresh cues about the US Federal Reserve's (Fed) future policy path, which will influence the near-term US Dollar (USD) price dynamics and provide some meaningful impetus to the NZD/USD pair. In the meantime, inflationary jitters stemming from rising oil prices due to the Middle East crisis remain supportive of elevated US Treasury bond yields. This, along with persistent uncertainties surrounding the Middle East crisis, continues to underpin the safe-haven Greenback.
In fact, President Donald Trump has asserted that the US is not engaged in talks with Iran and that the naval blockade of Iranian ports remains in full force. Moreover, Trump posted a map on Truth Social calling the Strait of Hormuz the new US territory. The post further sharpened the US-Iran standoff as Tehran kept the strategic waterway closed, demanding that the US agree to its conditions for shipping to resume. This keeps the geopolitical risk premium in play and supports the USD.
Meanwhile, global supply disruption fears lifted crude oil prices to a nearly three-week top, reviving inflation fears and keeping bets for at least one Fed rate hike in 2026 on the table. The outlook favors USD bulls and backs the case for deeper losses for the NZD/USD pair. However, the Reserve Bank of New Zealand's (RBNZ) hawkish tilt, stressing the need to withdraw some of its policy support, should support the New Zealand Dollar (NZD) and help limit losses for the currency pair.
Brown Brothers Harriman’s Elias Haddad argues that “above target inflation, more favorable domestic growth outlook, and a policy rate near the lower-end of the RBNZ’s neutral range (2.20%-4.10%) argue for additional RBNZ rate hikes.” He notes that the “swaps curve more than fully price in 75bps of tightening over the next twelve months to 3.25% which bodes well for NZD,” reinforcing a constructive medium-term backdrop for the Kiwi.
NZD/USD 4-hour chart
Technical Analysis
The NZD/USD pair holds a constructive near-term bias above the 200-period Simple Moving Average (SMA) at 0.5821 on the 4-hour chart. Spot prices also trade above the 23.6% Fibonacci retracement of the June-August upswing, suggesting that buyers retain control while the broader recovery off the 0.5627 swing low stays intact.
The next significant resistance is the Fibo. anchor around 0.5924, where a sustained break higher would open the way for a deeper corrective advance. On the downside, initial support is seen at the 23.6% retracement at 0.5854, followed by the 200-period SMA near 0.5821 and the 38.2% retracement at 0.5811.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
New Zealand Dollar Price This week
The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies this week. New Zealand Dollar was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.09% | -0.03% | 0.10% | 0.17% | 0.17% | 0.39% | 0.00% | |
| EUR | 0.09% | 0.20% | 0.18% | 0.27% | 0.25% | 0.52% | 0.11% | |
| GBP | 0.03% | -0.20% | 0.06% | 0.06% | 0.02% | 0.28% | -0.15% | |
| JPY | -0.10% | -0.18% | -0.06% | 0.09% | 0.02% | 0.28% | -0.11% | |
| CAD | -0.17% | -0.27% | -0.06% | -0.09% | -0.05% | 0.20% | -0.21% | |
| AUD | -0.17% | -0.25% | -0.02% | -0.02% | 0.05% | 0.26% | -0.16% | |
| NZD | -0.39% | -0.52% | -0.28% | -0.28% | -0.20% | -0.26% | -0.42% | |
| CHF | -0.01% | -0.11% | 0.15% | 0.11% | 0.21% | 0.16% | 0.42% |
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).
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
