NZD/USD posts fresh three-week high near 0.6150 in countdown to RBNZ policy

NZD/USD prints a fresh three-week high amid weak US Dollar and uncertainty ahead of RBNZ policy.
The US Dollar falls on the backfoot due to moderating US labor market conditions.
Investors expect that the RBNZ will hold its OCR at 5.5%.

Sagar Dua FXStreet

The NZD/USD pair refreshes a three-week high near 0.6150 in Monday’s Asian session. The Kiwi pair extends its winning streak for the fifth trading session as a debate over the Federal Reserve (Fed) to begin reducing interest rates from the September meeting has heated up after the United States (US) Nonfarm Payrolls (NFP) report for June pointed to normalization of labor market strength.

According to the CME FedWatch tool, 30-day Federal Funds Futures pricing data shows that the probability of rate cuts in September has improved to 75.8% from 64% recorded a week ago. The data also shows that the Fed will deliver subsequent rate cuts in the November or December meeting.

The data from the NFP report showed that the Unemployment Rate unexpectedly rose to 4.1% from the estimates and the prior release of 4.0%. Average Hourly Earnings, a measure to wage growth momentum, decelerated expectedly on both monthly and an annual basis. Fresh hiring came in higher at 206K from estimates of 190K but lower than May’s reading of 218K.

Growing speculation about Fed rate cuts has weighed heavily on the US Dollar. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades close to three-week low near 104.85. 10-year US Treasury yields edge higher in Monday’s trading hours but are close to weekly low around 4.29%.

This week, the New Zealand Dollar (NZD) will be in the spotlight due to the Reserve Bank of New Zealand’s (RBNZ) monetary policy meeting on Wednesday. The RBNZ is widely anticipated to leave its Official Cash Rate (OCR) unchanged at 5.5%. Therefore, investors will pay close attention to the commentary on the interest rate outlook. Market participants see the RBNZ keeping its key rates steady for the entire year.

Economic Indicator

RBNZ Interest Rate Decision

The Reserve Bank of New Zealand (RBNZ) announces its interest rate decision after its seven scheduled annual policy meetings. If the RBNZ is hawkish and sees inflationary pressures rising, it raises the Official Cash Rate (OCR) to bring inflation down. This is positive for the New Zealand Dollar (NZD) since higher interest rates attract more capital inflows. Likewise, if it reaches the view that inflation is too low it lowers the OCR, which tends to weaken NZD.

Why it matters to traders?

The Reserve Bank of New Zealand (RBNZ) holds monetary policy meetings seven times a year, announcing their decision on interest rates and the economic assessments that influenced their decision. The central bank offers clues on the economic outlook and future policy path, which are of high relevance for the NZD valuation. Positive economic developments and upbeat outlook could lead the RBNZ to tighten the policy by hiking interest rates, which tends to be NZD bullish. The policy announcements are usually followed by Governor Adrian Orr’s press conference.

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

EUR/USD looks apathetic around 1.1770

EUR/USD comes under renewed pressure on Tuesday, deflating below the 1.1800 support and reversing two consecutive days of gains. The pair’s decline follows the persistent move higher in the US Dollar, as trade uncertainty dominates the sentiment ahead of President Trump’s SOTU speech.

GBP/USD regains 1.3500 and above

GBP/USD extends its advance for the third day in a row on Tuesday, this time retesting the area beyond the 1.3500 hurdle. Cable’s uptick comes despite decent gains in the Greenback and the dovish message from the BoE’s Bailey at the UK Parliament.

Gold appears offered around $5,150

Gold is giving back a good portion of the recent multi-day rally, receding to the $5,150 zone per troy ounce amid the decent bounce in the US Dollar and mixed US Treasuty yields. In the meantime, markets’ attention remain on upcoming comments from Fed speakers.

Ripple’s DeFi shift in focus: Navigating XRPL EVM sidechain growth, XRPFi migration and liquidity

Ripple (XRP) has continued to trade under pressure, extending its decline by approximately 63% from the record high of $3.66 in July. The remittance token is trading above support at $1.35, while its upside appears limited by key supply zones, starting with $1.40, at the time of writing on Tuesday.

The Citrini report: How a debatable AI narrative can shake Wall Street

That AI-related headline alone was enough to rattle investors.US stocks slid sharply on Monday after a widely circulated Citrini Research memo outlined a hypothetical “2028 Global Intelligence Crisis”, warning that rapid AI adoption could push US unemployment into double digits as early as by mid-2028.

XRP pressured by weak ETF flows and declining retail interest

Ripple (XRP) is edging lower, trading above its intraday low of $1.32 at the time of writing on Tuesday. The decline from its weekly opening of $1.39 reflects heightened volatility in the broader cryptocurrency market, accentuated by tariff-triggered uncertainty.