|

New Zealand Dollar stabilizes after US inflation data as RBNZ hold expectations cap upside

  • NZD/USD stabilizes around 0.5650 after seven consecutive losing days.
  • Latest US inflation data weigh on the US Dollar and reduce expectations of a Fed rate hike in July.
  • Expectations that the RBNZ will keep rates unchanged in July continue to pressure the NZD.

NZD/USD trades around 0.5650 on Friday, up 0.05% at the time of writing, as the New Zealand Dollar (NZD) remains under pressure despite a weaker US Dollar (USD) following the latest US inflation data.

The US Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's (Fed) preferred inflation gauge, rose 4.1% YoY in May, matching market expectations. On a monthly basis, the PCE Price Index increased by 0.4%, below the 0.5% consensus forecast, reinforcing expectations that inflationary pressures may have peaked or are close to doing so.

Following the release, investors scaled back expectations for a 25-basis-point Fed rate hike at the July meeting. According to the CME FedWatch tool, the chance of a July hike fell to around 29.9%, down from 38.5% a week ago, putting pressure on the US Dollar.

However, the New Zealand Dollar has struggled to capitalize on the Greenback's weakness. Expectations that the Reserve Bank of New Zealand (RBNZ) will keep its Official Cash Rate unchanged at its July meeting continue to limit the Kiwi's upside potential. ASB Bank has dropped its forecast for a July rate hike and now expects the RBNZ to remain on hold before resuming gradual tightening from September, with the Official Cash Rate projected to peak at 3.25% in early 2027.

Markets also continue to view a September Fed rate hike as a realistic possibility, even though near-term expectations have eased following the PCE release. This divergence in monetary policy expectations between the two central banks could continue to shape NZD/USD price action in the coming days.

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 Australian Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.46%-0.19%-0.10%-0.19%0.06%-0.06%-0.38%
EUR0.46%0.26%0.37%0.30%0.53%0.37%0.09%
GBP0.19%-0.26%0.13%0.00%0.27%0.13%-0.18%
JPY0.10%-0.37%-0.13%-0.10%0.15%0.00%-0.29%
CAD0.19%-0.30%-0.01%0.10%0.25%0.10%-0.21%
AUD-0.06%-0.53%-0.27%-0.15%-0.25%-0.13%-0.45%
NZD0.06%-0.37%-0.13%-0.01%-0.10%0.13%-0.30%
CHF0.38%-0.09%0.18%0.29%0.21%0.45%0.30%

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

Ghiles Guezout

Ghiles Guezout is a Market Analyst with a strong background in stock market investments, trading, and cryptocurrencies. He combines fundamental and technical analysis skills to identify market opportunities.

More from Ghiles Guezout
Share:

Editor's Picks

GBP/USD trims gains, back to around 1.3500

GBP/USD now surrenders part of the earlier move to multi-week peaks around 1.3530 and comes close to the 1.3500 support on Monday. Cable’s uptick comes in tandem with decent gains in the Greenback, always amid persistent uncertainty lingering over the reopening of the Strait of Hormuz and US-Iran talks.

EUR/USD slips to daily lows near 1.1540

EUR/USD now loses further momentum and recedes toward the 1.1540 zone, or daily lows, on Monday. The pair’s bearish performance action comes as investors continue to assess Friday’s disappointing US jobs data in a context where renewed tensions in the Middle East lend decent support to the US Dollar.

Gold clings to daily gains; focus is back to $4,400

Gold picks up pace and advances past the $4,350 mark per troy ounce, adding to Friday’s gains. That said, the yellow metal keeps pushing harder despite the better tone in the US Dollar, and is closely following the Fed’s interest-rate outlook as well as developments in the Middle East

Crypto Today: Bitcoin, Ethereum, XRP eye short-term recovery amid ETF inflows
Cryptocurrency prices are gaining traction on Monday, with Bitcoin (BTC) trading above $65,000, Ethereum (ETH) holding the near-term $1,900 support and Ripple (XRP) hovering above the critical $1.00 demand zone. The broad recovery comes amid capital inflows through US-listed Exchange-Traded Funds (ETFs).
US Payrolls miss – RBA on deck tomorrow
It would be remiss of me not to kick off this morning’s report with a rundown of last Friday’s US jobs report, which was a belter. Headline payrolls fell by 23,000, versus expectations of an 80,000 gain. The BLS noted that May was revised down by 66,000 (from 129,000) and June by 37,000 (from 57,000), resulting in combined May-June revisions of 103,000 lower than previous reports.
9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?
The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.