NZD/USD trades above 0.5800, over two-month top amid dovish Fed-inspired USD weakness
- NZD/USD attracts buyers for the fifth straight day amid the dovish Fed-inspired USD weakness.
- Traders ramped up bets for more Fed rate cuts following Fed Chair Jerome Powell’s comments.
- A positive risk tone and the RBNZ’s hawkish tilt underpin the Kiwi, further supporting the pair.
The NZD/USD pair holds steady above the 0.5800 mark, close to an over two-month high touched the previous day, during the Asian session. Moreover, the fundamental backdrop favors bullish traders and suggests that the path of least resistance for spot prices remains to the upside.
The US Dollar (USD) slumped to its lowest level since October 24 following the Federal Reserve's (Fed) dovish cut on Thursday, which, in turn, is seen as a key factor acting as a tailwind for the NZD/USD pair. In a widely-expected move, the US central bank lowered interest rates at the end of a two-day meeting, but indicated that it will likely pause its easing cycle in January. Adding to this, policymakers projected just one-quarter-percentage-point cut in 2026, the same outlook as in September.
Investors, however, remained hopeful about further cuts ahead in the wake of Fed Chair Jerome Powell's remarks at the post-meeting press conference. Powell said that the US labor market has significant downside risks and the Fed does not want its policy to push down on job creation. Traders were quick to react and are now pricing in two more rate cuts in 2026. This, along with the upbeat market mood, continues to undermine the safe-haven buck and benefit the perceived riskier Kiwi.
The New Zealand Dollar (NZD) draws additional support from the Reserve Bank of New Zealand's (RBNZ) hawkish outlook on the future policy path. In fact, the RBNZ signaled the end of its easing cycle after lowering its policy rate by 25 bps to the lowest level in more than three years in November. This marks a significant divergence in comparison to dovish Fed expectations and validates the near-term positive outlook for the NZD/USD pair amid the absence of relevant economic releases on Thursday.
US Dollar Price This Month
The table below shows the percentage change of US Dollar (USD) against listed major currencies this month. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.87% | -1.10% | -0.31% | -1.33% | -1.85% | -1.42% | -0.51% | |
| EUR | 0.87% | -0.23% | 0.58% | -0.47% | -0.99% | -0.56% | 0.36% | |
| GBP | 1.10% | 0.23% | 1.06% | -0.23% | -0.76% | -0.33% | 0.60% | |
| JPY | 0.31% | -0.58% | -1.06% | -1.03% | -1.57% | -1.14% | -0.22% | |
| CAD | 1.33% | 0.47% | 0.23% | 1.03% | -0.58% | -0.06% | 0.83% | |
| AUD | 1.85% | 0.99% | 0.76% | 1.57% | 0.58% | 0.44% | 1.37% | |
| NZD | 1.42% | 0.56% | 0.33% | 1.14% | 0.06% | -0.44% | 0.93% | |
| CHF | 0.51% | -0.36% | -0.60% | 0.22% | -0.83% | -1.37% | -0.93% |
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
