New Zealand Dollar trades with positive bias but lacks follow-through amid bullish USD
- NZD/USD gains some positive traction as the USD pauses the recent rally to a one-month high.
- Energy-driven inflation fears bolster Fed hike bets and favor USD bullish amid US-Iran tensions.
- Traders look to flash US PMIs for some impetus as the focus remains on the FOMC next week.
The NZD/USD pair attracts some buyers during the Asian session on Friday and moves away from a one-and-a-half-week trough, around the 0.5760 region touched the previous day. Spot prices, however, lack follow-through and remain below the 0.5800 mark amid the underlying bullish tone surrounding the US Dollar (USD).
In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, sits near its highest level on June 26 on the back of escalating US-Iran tensions and hawkish US Federal Reserve (Fed) expectations. The US military announced that it has completed another round of strikes against Iran on Thursday, marking the 13th straight night of operations. Meanwhile, Iran and its allies are launching retaliatory strikes against US-linked military assets in Kuwait, Bahrain and Jordan.
Adding to this, Iran-aligned Houthi forces struck two Saudi oil tankers in the Red Sea, describing the action as part of a naval blockade against Saudi Arabia. This comes on top of the closure of the Strait of Hormuz, exacerbating supply disruption concerns and lifting crude oil prices to a fresh high since June 11. This fuels inflationary worries and bolsters bets that the US central bank will raise borrowing costs by the end of this year, which supports the USD and caps gains for the NZD/USD pair.
Meanwhile, US President Donald Trump imposed sweeping new tariffs ranging from 10% to 12.5% on 60 of the country's key trading partners, covering 99.4% of US imports, threatening to reignite a global trade war. This further tempers investors' appetite for riskier assets, supporting the safe-haven buck. Traders, however, seem hesitant to place aggressive bullish bets on the USD and opt to move to the sidelines as the market focus now shifts to the highly-anticipated FOMC policy meeting next week.
In the meantime, stronger-than-expected inflation data from New Zealand reaffirmed expectations that the Reserve Bank of New Zealand (RBNZ) will deliver another rate hike at its September meeting. This is seen lending some support to the New Zealand Dollar (NZD) and the NZD/USD pair as traders now look to the flash US PMIs for some impetus. Nevertheless, spot prices seem poised to register heavy losses for the first time in four weeks and remain at the mercy of the USD price dynamics.
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 Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.07% | 0.03% | -0.02% | -0.03% | -0.06% | -0.07% | 0.06% | |
| EUR | 0.07% | 0.05% | 0.00% | -0.01% | -0.05% | -0.07% | 0.07% | |
| GBP | -0.03% | -0.05% | -0.04% | -0.07% | -0.09% | -0.10% | 0.01% | |
| JPY | 0.02% | 0.00% | 0.04% | -0.00% | -0.05% | -0.05% | 0.06% | |
| CAD | 0.03% | 0.01% | 0.07% | 0.00% | -0.05% | -0.06% | 0.07% | |
| AUD | 0.06% | 0.05% | 0.09% | 0.05% | 0.05% | -0.00% | 0.10% | |
| NZD | 0.07% | 0.07% | 0.10% | 0.05% | 0.06% | 0.00% | 0.11% | |
| CHF | -0.06% | -0.07% | -0.01% | -0.06% | -0.07% | -0.10% | -0.11% |
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.
