- NZD/USD extends its losses after the release of Inflation Expectations from New Zealand.
- RBNZ Inflation Expectations (Q1) rose by 2.5%, down from the previous reading of 2.7%.
- The US Dollar gains ground ahead of the scheduled release of the US Inflation data.
NZD/USD continues to decline for the second consecutive session, reaching near 0.6110 during the Asian trading session on Tuesday. The New Zealand Dollar (NZD) faces pressure against the US Dollar (USD), partly due to lower Kiwi inflation expectations in the first quarter. RBNZ Inflation Expectations (QoQ) increased by 2.5%, down from the previous reading of 2.7%.
Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr testified before the Finance and Expenditure Committee on Monday, emphasizing that inflation remains elevated, prompting the RBNZ to maintain the cash rate at 5.5%. Additionally, RBNZ Deputy Governor (Financial Stability) Christian Hawkesby reiterated the strength of the New Zealand financial system, stating that it can withstand high interest rates. Furthermore, New Zealand Finance Minister Nicola Willis announced that the government budget will be revealed on May 30th.
The US Dollar Index (DXY), which gauges the USD against six major currencies, aims to hold onto its recent gains, climbing to around 104.20. Despite this upward movement, the 2-year and 10-year US bond yields remain at 4.47% and 4.16%, respectively, at the current time. These relatively lower yields may limit the upward momentum of the Greenback.
The NZD/USD pair faces downward pressure as the US Dollar strengthens amid subdued US Treasury yields. Market sentiment remains mixed ahead of the release of US inflation data scheduled for Tuesday, which could influence expectations regarding interest rates.
The US Consumer Price Index (CPI) is projected to moderate, with a year-on-year increase of 2.9% compared to the previous rise of 3.4%. Similarly, the month-over-month rate is expected to remain unchanged at 0.2%. Core CPI YoY is anticipated to rise by 2.9%, down from the previous increase of 3.4%. The monthly core inflation is forecasted to stay consistent at 0.3%.
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
Bitcoin reaches new record highs past $112,000
Bitcoin derivatives data shows a positive outlook, with CoinGlass BTC's Open Interest rising by 8.07% to $79.45 billion, close to its May 23 record high. This indicates more money entering the market and new purchasing, potentially fueling the BTC price surge.
EUR/USD tumbles to new lows near 1.1650
The selling pressure on the EUR/USD now gathers extra steam and sends the pair to the 1.1650 zone, or two-week lows on Thursday. The surprisingly good weekly readings from the US employment market statistics, coupled with hawkish remarks from the Fed’s Musalem, boost the US Dollar and put the risk complex under further strain.
Gold trims gains, holds on above $3,300
Gold reduces its earlier advance and comes close to the $3,300 mark per troy ounce on Thursday. The benchmark US 10-year rates have steadied following a large decline the day before, posing problems for XAU/USD in its bid to climb higher.
GBP/USD deflates to two-week lows near 1.3530
GBP/USD is under further downside pressure, falling into the 1.3530 zone on the back of the stronger Greenback and the broad-based cautious stance in the market. Solid US data and supportive Fedspeak allows the US Dollar to pick up further pace, weighing down on the risk-associated universe.
New US tariffs target Asia, but some countries stand to gain
President Trump’s new tariffs are higher than expected for most Asian economies. Moreover, most countries will face additional tariff rates on transshipments. The new announcements are silent on Singapore, India and the Philippines, which might stand to benefit from tariff concessions if negotiations progress favourably.
Best Brokers for EUR/USD Trading
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.