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.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.46% | -0.19% | -0.10% | -0.19% | 0.06% | -0.06% | -0.38% | |
| EUR | 0.46% | 0.26% | 0.37% | 0.30% | 0.53% | 0.37% | 0.09% | |
| GBP | 0.19% | -0.26% | 0.13% | 0.00% | 0.27% | 0.13% | -0.18% | |
| JPY | 0.10% | -0.37% | -0.13% | -0.10% | 0.15% | 0.00% | -0.29% | |
| CAD | 0.19% | -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% | |
| NZD | 0.06% | -0.37% | -0.13% | -0.01% | -0.10% | 0.13% | -0.30% | |
| CHF | 0.38% | -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
FXStreet
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.
