- RBNZ Governor Orr was seen dovish, which seems to be applying pressure to the NZD.
- GDP and Initial Jobless Claims cushion the USD. Weak Chicago PMI figures limit the upside.
- Markets adjusted their expectations for a June rate cut which also adds strength to the USD.
The NZD/USD is currently traded at 0.5977, reflecting a decrease of 0.43%. The pair's movement was influenced by somewhat dovish comments from the Reserve Bank of New Zealand (RBNZ) Governor Orr and by mixed data from the US. Ahead of Friday’s session, markets await Personal Consumption Expenditures (PCE) data from the US from February.
RBNZ Governor Orr commented that inflation is normalizing while aggregate demand is slowing which would lead to a low and stable inflation on the horizon in hand with normalized interest rates. As a reaction markets are betting on 75 bps of easing in 2024, while the RBNZ hinted that the first cut would come in 2025 and as long as markets underestimate the bank, the NZD may suffer additional losses.
On the USD side, The recent release of Initial Jobless Claims data showed figures slightly below the consensus, with 210K reported against the anticipated 215K for the week ending on March 23. Additionally, the Q4 Gross Domestic Product (GDP) was revised upwards, showcasing a yearly growth of 3.4%. However, not all economic indicators were positive; the March Chicago Purchasing Managers Index (PMI) data from the Institute for Supply Management fell short of expectations, coming in at 41.4 against the forecasted 46 and previous 44.
Regarding the Federal Reserve (Fed) expectations, the probability of a rate cut in June has decreased to 66% from 85% earlier in the week, providing some support to the Greenback. That being said, the release of the headline Personal Consumption Expenditures (PCE) on Friday, will likely fuel volatility markets as investors may readjust their bets on the Fed.
NZD/USD technical analysis
On the daily chart, the NZD/USD pair's Relative Strength Index (RSI) is notably fixated within negative territory. The latest RSI reading swings back to a negative trend, marking a score of 33 which suggests a strong bearish sentiment in the market. Concurrently, the Moving Average Convergence Divergence (MACD) histogram prints red bars, evidencing a negative momentum that further reinforces the downward pressure on this currency pair.
Moving to the Simple Moving Average (SMA) analysis, the pair is trading below the respective 20, 100, and 200-day Simple Moving Averages (SMAs), supporting the continuing negative trend.
NZD/USD daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.