NZD/USD is losing height following NZ budget announcement

Omkar Godbole FXStreet Contributor

NZD/USD is on the retreat despite upbeat comments on growth and bullish long-term interest forecasts in the NZ budget.

The New Zealand government expects a bigger surplus of NZD 2.86 billion in 2017-18. The official statement says the real GDP growth is forecast to pick up slightly in 2017, supported by migration inflows, investment and a recovery in exports. Growth is expected to peak at 3.8% in 2019.

The budget also sees a pick in the underlying inflation pressures as spare capacity is used up, prompting higher interest rates. Long-term interest rates are expected to rise gradually to 4.3% by 2021.

Finance Minister Steve Joyce announced a NZD 11 billion spending on infrastructure over the next four years. Despite this, the NZD/USD is losing height and was last seen trading around 0.7036 levels.

NZD/USD Technicals

A break above 0.7054 (100-DMA) would open up upside towards 0.7090 (Mar 21 high) and 0.7111 (200-DMA). On the downside, the immediate support is seen at 0.70 (5-dMA) ahead of 0.6966 (50-DMA) and 0.6947 (10-DMA).

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bearish	Oversold	High
1H	Bullish	Neutral	High
4H	Bullish	Neutral	Shrinking
1D	Bearish	Overbought	Expanding
1W	Bearish	Neutral	Low
Updated May 25, 02:15 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD trims losses and returns to the 1.1750 area

The US Dollar resumed its decline in the American afternoon, helping EUR/USD trim early losses. The pair trades around 1.1750 as market participants gear up for the European Central Bank monetary policy decision and the United States Consumer Price Index.

GBP/USD consolidates above mid-1.3300s as traders await BoE and US CPI report

The GBP/USD pair struggles to capitalize on the overnight bounce from the 1.3310 area, or a one-week low, and oscillates in a narrow band during the Asian session on Thursday. Spot prices currently trade around the 1.3370 region, down less than 0.10% for the day, as traders opt to wait on the sidelines ahead of the key central bank event risk and US consumer inflation data.

Gold declines on profit-taking, USD strength ahead of US CPI release

Gold price edges lower below $4,350 during the Asian trading hours on Thursday. The precious metal retreats from seven-week highs amid some profit-taking and a rebound in the US Dollar (USD). The potential downside for the yellow metal might be limited after the recent US jobs data reinforce market expectations of further interest rate cuts by the US Federal Reserve and drag the USD lower.