NZD/USD Price Forecast: Sets for a strong weekly close as RBNZ calls for quick hikes
- NZD/USD jumps to near 0.5967 as RBNZ Governor Breman supports quick and steeper interest rate hikes.
- RBNZ’s Breman expresses that the committee is focused on cooling inflationary pressures.
- Investors await US President Trump’s approval of the 60-day MoU with Iran.
The NZD/USD pair trades 0.55% higher to near 0.5967 during the European trading session on Friday and is up 2% so far this week. The Kiwi pair extends its winning streak for the third trading day amid hopes that the Reserve Bank of New Zealand (RBNZ) will adopt an ultra-hawkish monetary policy stance to bring inflation lower.
New Zealand Dollar Price This week
The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies this week. New Zealand Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.02% | 0.26% | 0.27% | -0.00% | -0.04% | -1.47% | -0.26% | |
| EUR | 0.02% | 0.31% | 0.32% | 0.02% | -0.05% | -1.45% | -0.21% | |
| GBP | -0.26% | -0.31% | -0.24% | -0.30% | -0.36% | -1.76% | -0.51% | |
| JPY | -0.27% | -0.32% | 0.24% | -0.29% | -0.35% | -1.77% | -0.55% | |
| CAD | 0.00% | -0.02% | 0.30% | 0.29% | -0.06% | -1.48% | -0.20% | |
| AUD | 0.04% | 0.05% | 0.36% | 0.35% | 0.06% | -1.40% | -0.20% | |
| NZD | 1.47% | 1.45% | 1.76% | 1.77% | 1.48% | 1.40% | 1.27% | |
| CHF | 0.26% | 0.21% | 0.51% | 0.55% | 0.20% | 0.20% | -1.27% |
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).
Earlier in the day, RBNZ Governor Anna Breman said that the interest rates were likely to increase sooner and by more than previously signalled to combat inflation, Reuters reported. Breman added, "The committee remains focused on ensuring inflation returns to target while avoiding unnecessary volatility in the economy."
This was the second time this week when RBNZ Governor Breman stressed on tightening monetary conditions to slow down the inflation growth. “Committee sees inflationary pressures going forward, agrees cash rate needs to be higher going forward,” Breman said on Wednesday after the central bank decided to leave the Official Cash Rate (OCR) steady at 2.25%.
Meanwhile, investors await the approval of the United States (US)-Iran agreement to a 60-day Memorandum of Understanding (MoU) by President Donald Trump. As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades marginally higher to near 99.10.
NZD/USD technical analysis
NZD/USD trades higher at around 0.5967 at press time. The pair holds above the 20-day exponential moving average (EMA) at 0.5894, keeping the near-term tone constructive as price extends its recovery from last week’s lows.
The Relative Strength Index (RSI) hovers near 59, hinting at firm but not yet overbought bullish momentum while the spot price pivots around the opening level for the day.
On the downside, initial support is seen at the 20-day EMA around 0.5894, where a break would expose deeper losses toward the May 26 low at 0.5831. On the upside, the pair could pivot to a fresh leg of rally if it manages to extend its advance above the May 6 high at 0.5991. Looking up, the major resistance zone will be the February 26 high at 0.6014, followed by the February 18 high at 0.6054.
(The technical analysis of this story was written with the help of an AI tool.)
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
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.
