CFD Trading Rate New Zealand Dollar vs US Dollar (NZDUSD)

• NZD/USD depreciates as traders expect the Fed to adopt a cautious approach regarding a rate cut next month.
• The Fed remains on alert following the latest US inflation data, which highlighted an increase in consumer spending for October.
• The New Zealand Dollar may struggle as the US plans further AI chip sanctions against China.

The NZD/USD pair remains subdued near 0.5890 during early European trading hours. The pair's weakness can be attributed to the stronger US Dollar (USD), driven by a cautious market sentiment regarding the Federal Reserve’s (Fed) December interest rate decision. Trading volumes may remain light due to the US Thanksgiving holiday.

Wednesday’s latest US inflation data indicated solid growth in consumer spending for October, but it also highlighted a stagnation in progress toward lowering inflation, keeping the Fed on alert. The US Personal Consumption Expenditures (PCE) Price Index rose by 2.3% year-over-year in October, up from 2.1% in September. Meanwhile, the core PCE Price Index, which excludes volatile food and energy prices, increased by 2.8%, slightly higher than the 2.7% recorded the previous month.

According to the CME FedWatch Tool, futures traders are now pricing in a 68.2% chance that the Fed will cut rates by a quarter point in December, up from 59.4%, a day ago. Nonetheless, they anticipate the Fed leaving rates unchanged at its January and March meetings.

The New Zealand Dollar (NZD) may face headwinds as the United States (US) plans to implement new measures next week aimed at restricting China’s progress in artificial intelligence technology. Given New Zealand's strong trade relationship with China, any significant economic impacts on China could have ripple effects on Kiwi markets.

On Wednesday, the Reserve Bank of New Zealand (RBNZ) delivered a 50 basis point (bps) cut to its Official Cash Rate (OCR), bringing it down from 4.75% to 4.25% in November’s policy meeting. During the post-meeting press conference, RBNZ Governor Adrian Orr indicated that the bank’s projections suggest another potential 50 bps cut in February 2025, contingent on economic activity. Orr also expressed confidence that domestic inflationary pressures will continue to subside.

• NZD/USD trades with mild gains around 0.5900 in Thursday’s early Asian session.
• The cautious stance from the Fed on further rate cuts might lift the US Dollar. 
• The speculations about a potential 10% tariff on Chinese goods could weigh on the Kiwi. 

The NZD/USD pair gains traction to around 0.5900 during the Asian trading hours on Thursday, bolstered by the weaker US Dollar (USD). The Greenback edges lower due to the month-end flows and some profit-taking for the US long weekend. The US markets will be closed on Thursday in observance of the Thanksgiving holiday.

However, the downside for the Greenback might be limited amid the expectation of a less aggressive rate cut by the Federal Reserve (Fed). The signal of stalled inflation progress hinted that the Fed might be cautious about further rate cuts. 

The US Personal Consumption Expenditures (PCE) Price Index rose 2.3% YoY in October, compared to a 2.1% increase in September, the US Bureau of Economic Analysis (BEA) reported on Wednesday. The core PCE Price Index, which excludes volatile food and energy prices, climbed 2.8% in the same period, up from 2.7% in September. Both figures came in line with the market consensus.

“This paves the way for a 25 basis point cut in December and then probably a pause. But the pause won't likely be due to inflation data, but because of uncertainties over Trump's tariffs. I think the Fed will grow cautious,” noted Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

On Wednesday, the Reserve Bank of New Zealand (RBNZ) decided to cut its Official Cash Rate (OCR) by 50 basis points (bps) from 4.75% to 4.25% in the November meeting. RBNZ Governor Adrian Orr noted during the press conference that the forecasts align with a potential 50 bps reduction in February 2025, contingent on economic activity. He further stated that domestic inflation pressures would continue to ease. In the meantime, the recent tariff threats from US President-elect Donald Trump could exert some selling pressure on the Kiwi as China has been the largest trading partner of New Zealand. 

• NZD/USD soared 1.02% to trade near 0.5895.
• The pair approached the 20-day SMA at around 0.5910, seemingly continuing its recovery.

The NZD/USD rose by 1.02% to trade near 0.5895 in Wednesday's session, continuing its recovery and approaching the 20-day Simple Moving Average (SMA) at around 0.5910. The Relative Strength Index (RSI) indicates that buying pressure is recovering, while the Moving Average Convergence Divergence (MACD) shows that selling pressure is flat, which prints signs of a recovering buying momentum.

Should the pair breach the 20-day SMA, the outlook may improve further potentially targeting the 0.6000 area. On the downside, bears might invalidate the recovery if they regain the 0.5800 area and push the pair back below yearly lows. In addition, traders shouldn’t take their eyes of the looming bearish crossover between the 100 and 200-day SMA at around 0.6070 area which could give arguments to the bearish rhetoric.

NZD/USD daily chart

Downward momentum is beginning to build; NZD is expected to weaken to 0.5770, UOB Group’s FX analyst Quek Ser Leang and Lee Sue Ann note.

NZD is expected to weaken to 0.5770

24-HOUR VIEW: When NZD was at 0.5820 yesterday, we indicated that NZD ‘could drop further, but it does not appear to have enough momentum to reach 0.5770 for now.’ The subsequent did not quite turn out as we expected, as after dropping to 0.5797, NZD soared to 0.5865. It then pulled back to close at 0.5835. The outlook for NZD is mixed after the choppy price action. Overall, it could trade in a range of 0.5805/0.5860.”

1-3 WEEKS VIEW: “We revised our NZD view to negative yesterday (26 Nov, spot at 0.5820), indicating that ‘downward momentum is beginning to build, and NZD is expected to weaken to 0.5770.’ We will maintain the same view provided that 0.5875 (no change in ‘strong resistance’ level) is not breached.”

The New Zealand (NZD) traded choppy post-RBNZ and press conference. NZD was last at 0.5893 levels, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

Bearish momentum on daily chart shows signs of fading

“Gains in NZD post-decision was partially erased when Governor Orr’s press conference gets underway. In particular, Orr said that track implies steeper cash rate decline than Aug and that forward projection is consistent with 50bp cut in Feb-2025. Orr’s remarks suggest that RBNZ is not about to change pace of cut.”

“Bearish momentum on daily chart shows signs of fading while RSI rose from near oversold conditions. Technical bunce not ruled out. Resistance at 0.5915 (21 DMA), 0.60 (61.8% fibo retracement of 2023 low to 2024 high). Support at 0.5810, 0.5770 levels (2023 low).

• NZD/USD catches aggressive bids after the RBNZ’s expected 50 bps rate cut on Wednesday.
• The USD struggles near the weekly low amid sliding US bond yields and supports the pair.
• Trade war concerns might cap the risk-sensitive Kiwi ahead of the crucial US inflation data. 

The NZD/USD pair builds on the overnight bounce from sub-0.5800 levels, or a fresh year-to-date low and gains strong positive traction on Wednesday after the Reserve Bank of New Zealand (RBNZ) announced its policy decision. The intraday move up remains uninterrupted through the first half of the European session and lifts spot prices to the 0.5900 mark, or a one-week high in the last hour. 

As was widely anticipated, the RBNZ lowered the Official Cash Rate (OCR) by 50 basis points (bps), from 4.75% to 4.25% at the conclusion of the November policy meeting. In the post-meeting press conference, RBNZ Governor Adrian Orr said there had been little discussion on cutting rates by anything other than 50 bps. This might have disappointed some investors anticipating a more aggressive easing, which, in turn, boosts the New Zealand Dollar (NZD) and prompts aggressive intraday short-covering around the NZD/USD pair. 

Meanwhile, expectations that Scott Bessent – US President-elect Donald Trump's US Treasury secretary nominee – will restrain budget deficits drag the benchmark 10-year US Treasury yields to a fresh multi-week low. This, along with the optimism over a ceasefire deal between Israel and Hezbollah, keeps the safe-haven US Dollar (USD) depressed near the weekly low, which offers additional support to the NZD/USD pair. That said, concerns that Trump's tariff plans will trigger trade wars might cap gains for the risk-sensitive Kiwi. 

Traders might also opt to wait on the sidelines and look to the crucial US inflation data for cues about the Fed's rate-cut path, which, in turn, will drive the USD demand and provide a fresh impetus to the NZD/USD pair. Hence, the focus will remain glued to the US Personal Consumption Expenditure (PCE) Price Index data. In the meantime, the prelim (revised) US Q3 GDP print, along with US Durable Goods Orders, could influence the USD and produce short-term trading opportunities during the North American session.

• NZD/USD fell by 0.23% on Tuesday, slipping to 0.5830.
• Pair extended its decline and tallied a five-day losing streak, striking a fresh low below 0.5800, its lowest in over a year.
• Indicators warn about oversold conditions, which might push the pair somewhat upwards.

The NZD/USD plunged by 0.23% to 0.5830 in Tuesday's session, marking its fifth consecutive day in the red. This decline saw the pair set a new low below 0.5800, its lowest level in over a year with indicators echoing an intenses bearish momentum.

The technical analysis reveals a bearish picture for the NZD/USD pair. The key indicators depict mounting selling pressure, accentuating the bearish outlook. The Relative Strength Index (RSI), hovering in negative territory at 36, signifies the current selling sentiment. Similarly, the Moving Average Convergence Divergence (MACD) reinforces this bearish sentiment with its histogram transitioning to red and escalating.

Despite indicators hinting at oversold conditions suggesting a potential temporary upswing, the bears still dominate the pair's trajectory. Hence, a break below 0.5830 may exacerbate losses. The support levels of note are 0.5800, 0.5750, and 0.5730, while resistance stands at 0.5900, 0.5930, and 0.5950.

NZD/USD daily chart

• NZD/USD rebounds from 0.5800 as the US Dollar gives back opening gains.
• Investors await the US PCE inflation for fresh Fed interest rate guidance.
• The RBNZ is expected to cut interest rates by 50 bps to 4.25%.

The NZD/USD pair bounces back to near 0.5850 in Tuesday’s North American session after posting a fresh yearly low of 0.5800 in the opening session. The Kiwi pair recovers as the US Dollar (USD) surrenders its intraday gains triggered after United States (US) President-elect Donald Trump threatened to raise tariffs on other economies of North America from where he expects China to pour illicit drugs into the US economy.

Trump said he would impose 25% tariffs on Mexico and Canada and 10% on China in addition to 60%, which was mentioned in his election campaign. The initial reaction from the US Dollar was bullish, however, it failed to hold gains. The US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, drops below 107.00.

Meanwhile, investors await the Federal Open Market Committee (FOMC) minutes for the policy meeting held on November 7, which will be published at 19:00 GMT. In the policy meeting, the Fed reduced interest rates by 25 basis points (bps) to 4.50%-4.75%.

This week, investors will pay close attention to the US Personal Consumption Expenditure Price Index (PCE) data for October, which will be published on Wednesday. Economists expect the inflation data to have accelerated from September readings on an annual basis. The month-on-month headline and core PCE inflation data are estimated to have grown steadily. The inflation data will significantly influence market expectations for the Federal Reserve’s (Fed) likely interest rate action in the December meeting.

Going forward, the New Zealand Dollar (NZD) will be influenced by the Reserve Bank of New Zealand (RBNZ) interest rate decision, which will be announced on Wednesday. According to a Reuters poll, the RBNZ is expected to cut interest rates by 50 bps to 4.25%. This would be the second straight 50 bps interest rate cut by the RBNZ and the third one of the current rate-easing cycle.

The New Zealand Dollar (NZD) could drop further; at this time, it does not appear to have enough momentum to reach 0.5770 for now. In the longer run, downward momentum is beginning to build; NZD is expected to weaken to 0.5770, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

NZD is expected to weaken to 0.5770 in the longer run

24-HOUR VIEW: “Yesterday, when NZD was at 0.5855, we held the view that ‘provided that 0.5825 is not breached, NZD could edge higher to 0.5880.’ Our expectation did not materialize as NZD traded in a 0.5837/0.5869 range. NZD closed at 0.5845, but fell sharply in early Asian trade today. The sharp drop has scope to extend, but at this time, NZD does not appear to have enough momentum to reach the major support at 0.5770. Note that there is another support level at 0.5795. Minor resistance is at 0.5835; any rebound is likely to remain below 0.5855.”

1-3 WEEKS VIEW: “Our most recent narrative was from last Friday (22 Nov, spot at 0.5860), wherein ‘While the underlying tone has softened, any decline is likely part of a lower trading range of 0.5815/0.5905.’ We stated, ‘NZD is unlikely to break clearly below 0.5815.’ After dropping sharply early today, downward momentum is beginning to build. We expect NZD to weaken to 0.5770. We will maintain the same view provided that 0.5875 is not breached.”

• NZD/USD may find support around the lower boundary of the descending channel at the 0.5800 level.
• A corrective rebound is possible once the 14-day RSI falls below the 30 mark.
• The nine-day EMA at the level of 0.5867 would act as an immediate barrier.

NZD/USD extends its losing streak for the fifth successive day, trading around 0.5840 during European trading hours on Tuesday. A review of the daily chart highlights a deepening bearish trend as the pair moves within a descending channel pattern.

The nine-day Exponential Moving Average (EMA) remains below the 14-day EMA, signaling persistent weakness in short-term price momentum. Furthermore, the 14-day Relative Strength Index (RSI) is hovering just above the 30 level, reflecting the prevailing bearish sentiment. A dip below 30 would indicate oversold conditions, potentially paving the way for a corrective rebound.

Regarding its support, the NZD/USD pair tests the psychological level of 0.5800, which coincides with the lower boundary of the descending channel. A decisive break below this level would strengthen the bearish outlook, increasing downward pressure and potentially driving the pair toward its two-year low of 0.5772, last seen in November 2023.

On the upside, immediate resistance lies at the nine-day EMA around 0.5867, followed by the 14-day EMA at 0.5888, which aligns with the upper boundary of the descending channel. A breakout above this channel could weaken bearish momentum and pave the way for the pair to test the psychological resistance level of 0.6000.

NZD/USD: Daily Chart

• NZD/USD weakens to around 0.5810 in Tuesday’s Asian session. 
• The RBNZ is expected to cut its OCR to 4.25% at its meeting Wednesday.
• The cautious stance from the Fed might support the USD and cap the pair’s upside.

The NZD/USD pair attracts some sellers to around 0.5810 during the Asian trading hours on Tuesday. The rising expectation of aggressive rate cuts from the Reserve Bank of New Zealand (RBNZ) exerts some selling on the Kiwi. All eyes will be on the RBNZ interest rate decision on Wednesday. 

The New Zealand central bank will reduce the Official Cash Rate (OCR) by 50 basis points (bps) to 4.25% on Wednesday, according to the majority of economists by Bloomberg. ANZ analysts highlight that the upcoming RBNZ meeting is unlikely to spark a positive shift for the New Zealand Dollar (NZD) and the ongoing dovish stance from the central bank might continue to undermine the NZD against the US Dollar (USD) in the near term. 

President-elect Donald Trump said the US will impose an additional 10% tariff on Chinese goods on top of all existing levies due to the influx of illegal drugs such as narcotics, per Bloomberg. Early Tuesday, China's ambassador said that US trade policy will impact China and other countries. This, in turn, drags the China-proxy NZD lower as China is a major trading partner to New Zealand.

On the USD’s front, the stronger economic data and the cautious stance from the US Federal Reserve (Fed) might support the Greenback and create a headwind for the pair. Fed Chair Jerome Powell signaled last week that the Fed isn’t necessarily inclined to cut rates at the next upcoming meetings.“The economy is not sending any signals that we need to be in a hurry to lower rates,” said Powell.

 

• NZD/USD staged minor losses on Monday and traded near 0.5850.
• Bulls struggle to halt losing streak, having tallied a four-day decline and reaching its lowest levels since November 2023.
• With oscillating signals from indicators, the NZD/USD may experience sideways trading in the near term.

The NZD/USD continued losing on Monday, to fall near 0.5850. Bulls struggle to halt the losing streak, now at lows since November 2023 but sellers might start to ran out of steam.

The pair's daily Relative Strength Index (RSI) is in the negative territory with a value of 37, indicating a strong selling pressure but its rising while the Moving Average Convergence Divergence (MACD) is flat and in red, reinforcing the bearish sentiment.

Despite the oscillating signals from the RSI and MACD, the overall momentum remains bearish. The pair is currently trading sideways within a range, with indicators emitting mixed signals. While the strong selling momentum may be waning, sellers still maintain the upper hand. Traders should monitor any break below the 0.5830 area which coil make the pair plunge towards 0.5800, while a break towards 0.5900 could be the trigger of a short-term recovery.

NZD/USD daily chart

• NZD/USD surges above 0.5850 as the US Dollar extends its upside.
• The US Dollar plummets as investors expect Bessent to favor a more balanced tariff and taxation policy.
• Investors expect the RBNZ to cut interest rates by 50 bps to 4.25% on Wednesday.

The NZD/USD pair climbs above 0.5850 in the North American session on Monday. The Kiwi pair strengthens as the US Dollar (USD) extends its correction that was driven by a selection of veteran hedge fund manager Scott Bessent as Treasury Secretary by President-elect Donald Trump. The US Dollar Index (DXY), which tracks the Greenback’s value, had a weak opening near 106.80 and extends its downside to near 106.60.

The reaction from market participants was negative for the US Dollar (USD) as Treasury yields dived after bond markets gave a warm welcome to a seasoned hedge fund manager on expectations that he would bring fiscal discipline to the economy. "Bessent is seen as an antidote to Trump's most extreme economic views, XTB’s Kathleen Brook said. She added, “Bessent favors less government spending and is expected to advocate a slow and steady approach to potentially inflationary trade tariffs.”

Bessent also said in his interview with the Financial Times (FT) that he would focus on putting tariffs into action, cutting spending, and maintaining the status of the Greenback as the world's reserve currency.

For fresh guidance on United States (US) interest rates, investors look for the Personal Consumer Expenditure Price Index (PCE) data for October, which will be published on Wednesday. The PCE report is expected to show that price pressures grew at a faster pace on a year-on-year basis and rose steadily on month from readings in September.

The inflation data will influence market speculation for the Federal Reserve (Fed) interest rate decision for the December meeting. According to the CME FedWatch tool, the probability of the Fed cutting interest rates by 25 basis points (bps) to 4.25%-4.50% in December is 56%, while the rest supports borrowing rates to remain steady.

Meanwhile, the New Zealand Dollar (NZD) will be guided by the Reserve Bank of New Zealand (RBNZ) interest rate decision, which will be announced on Wednesday. According to a Reuters poll, the RBNZ is expected to cut interest rates by 50 bps to 4.25%. This would be the second straight 50 bps interest rate cut by the RBNZ and the third one of the current rate-easing cycle.

Provided that 0.5825 is not breached; the New Zealand Dollar (NZD) could edge higher to 0.5880. The next resistance at 0.5905 is unlikely to come under threat. In the longer run, the underlying tone has softened, but any decline is likely part of a lower trading range of 0.5815/0.5905, UOB Group’s FX analyst Quek Ser Leang and Lee Sue Ann notes.

The next resistance at 0.5905 is unlikely to come under threat

24-HOUR VIEW: “We indicated last Friday that NZD ‘is under mild downward pressure.’ We also indicated that it ‘is likely to edge lower, possibly testing 0.5835 before the risk of a rebound increases.’ We pointed out, ‘the next support at 0.5815 is unlikely to come under threat.’ Our view turned out to be correct, as NZD dropped to 0.5817 before rebounding. NZD closed at 0.5835 but opened higher today. From here, provided that 0.5825 is not breached, NZD could edge higher to 0.5880. This time around, the next resistance at 0.5905 is unlikely to come under threat.”

1-3 WEEKS VIEW: “Last Friday (22 Nov, spot at 0.5860), we highlighted that ‘While the underlying tone has softened, any decline is likely part of a lower trading range of 0.5815/0.5905.’ We added, ‘NZD is unlikely to break clearly below 0.5815.’ NZD subsequently dipped to 0.5817 and then rebounded. There has been no clear increase in either upward and downward momentum, and we continue to hold the same view for now.”

• NZD/USD depreciates toward the oversold region around the lower boundary of the descending channel at 0.5810 level.
• The nine-day EMA remains below the 14-day EMA, signaling continued weakness in short-term price momentum.
• The immediate resistance appears at the nine-day EMA at the level of 0.5875, followed by the descending channel’s lower boundary.

The NZD/USD pair continues its losing streak for the fourth consecutive day, trading near 0.5840 during European hours on Monday. An analysis of the daily chart indicates a strengthening bearish trend, as the pair remains confined within a descending channel pattern. 

The nine-day Exponential Moving Average (EMA) stays below the 14-day EMA, indicating sustained weakness in short-term price momentum. Additionally, the 14-day Relative Strength Index (RSI) hovers just above the 30 mark, underscoring bearish sentiment. A drop below 30 would signal oversold conditions, potentially setting the stage for a corrective rebound. 

On the downside, the NZD/USD pair may find support near the lower boundary of the descending channel, around 0.5810 level. A decisive break below this level would reinforce the bearish outlook, intensifying downward pressure and possibly pushing the pair toward its two-year low of 0.5772 level, last recorded in November 2023. 

Regarding its upside, immediate resistance is located at the nine-day EMA at the level of 0.5873, followed by the 14-day EMA at 0.5895 level, aligning with the upper boundary of the descending channel. A breakout above the descending channel could diminish bearish momentum, opening the door for the pair to target the psychological level of 0.6000.

NZD/USD: Daily Chart

• NZD/USD gains traction to around 0.5860 in Monday’s Asian session, up 0.55% on the day. 
• RBNZ is likely to reduce the OCR by 50 bps on Wednesday, bringing the rate to 4.25%. 
• The cautious stance from the Fed might support the USD. 

The NZD/USD pair gathers strength to near 0.5860 on Monday during the Asian trading hours, bolstered by the softer US Dollar (USD). All eyes will be on the Reserve Bank of New Zealand (RBNZ) interest rate decision on Wednesday. 

Data released by Statistics New Zealand on Monday showed that the country’s Retail Sales dropped by 0.1% QoQ in the third quarter (Q3), compared to the previous reading of a 1.2% fall. Retail sales fell for the second consecutive quarter as high interest rates dampened consumer sentiment, adding to signs that the economy was in recession in the middle of the year. 

Furthermore, investors expect aggressive interest rate cuts from the RBNZ, which might exert some selling pressure on the Kiwi. The swaps market is pricing in a 50 basis points (bps) cut on Wednesday, with some seeing a small chance of a 75 bps reduction. 

Meanwhile, the US Dollar Index (DXY), which measures the USD against a basket of currencies, currently trades near 106.85, down 0.62% on the day. The weaker Greenback acts as a tailwind for the NZD/USD pair. 

However, the cautious stance from the Federal Reserve (Fed) might cap the USD’s downside. Fed Governor Michelle Bowman said last week that the Fed’s progress toward 2% inflation has “stalled” and the US central bank should proceed "cautiously" when cutting interest rates. Additionally, Chicago Fed President Austan Goolsbee noted that it may make sense to slow the pace of interest rate cuts as the Fed gets close to where rates will settle.

• NZD/USD dipped by 0.54% on Friday, plunging to 0.5830.
• NZD/USD fell to the lowest level since early November as bears maintained control.
• While oversold conditions, as per indicators, could hint at a correction, the NZD/USD outlook remains negative towards the 0.5800-0.5900 range.

The NZD/USD pair extended its losses on Friday, declining by 0.54% to 0.5830, its lowest level since early November.

The technical indicators align with the bearish outlook, as the Relative Strength Index (RSI) has fallen sharply into the near oversold area at 33, indicating rising selling pressure. The RSI's decline is supported by the Moving Average Convergence Divergence (MACD), which is red and rising, and its histogram is negative, suggesting a bearish overall outlook. This bearish outlook is further supported by the pair's three-day losing streak and its trade below the 20-day Simple Moving Average (SMA) which is located at 0.5930.

While oversold conditions may lead to a correction, trades should eye the 0.5800-0.5900 range for sideways movements.

NZD/USD daily chart

• NZD/USD recovers mildly after refreshing the yearly low near 0.5820, however, the outlook remains bearish.
• The Fed is expected to take an “extended pause” after cutting interest rates next month.
• Investors expect the RBNZ to cut interest rates by 50 bps to 4.25% on Wednesday.

The NZD/USD pair rebounds slightly after posting a fresh yearly low near 0.5820 in the North American session on Friday. The Kiwi pair remains on the backfoot as the US Dollar (USD) performs strongly across the board on expectations that the Federal Reserve (Fed) will follow the interest rate cut path more gradually.

Analysts at Deutsche Bank expect that the Fed could take an “extended pause” that keeps Federal Fund rates above 4% through 2025. Their comments were backed by expectations that “The Republican sweep promises transformative changes,” policies such as higher import tariffs will likely boost growth to 2.5% next year and will also lead to inflation stalling at or above 2.5% through 2026.

For the December meeting, analysts expect the Fed to cut interest rates by 25 basis points (bps). According to the CME FedWatch tool, there is a 59% chance that the Fed will cut its key borrowing rates by 25 bps to 4.25%-4.50%.

On the New Zealand Dollar (NZD) front, investors will focus on the Reserve Bank of New Zealand (RBNZ) monetary policy, which will be announced on Wednesday. The RBNZ is expected to cut interest rates by 50 bps to 4.25%. This will be the third consecutive interest rate cut by the RBNZ and the second straight 50 bps reduction in a row.

NZD/USD extends its losing streak for the third trading day on Friday. The 20-day Exponential Moving Average (EMA) near 0.5930 continues to act as a major barricade for the NZD bulls. The 14-day Relative Strength Index (RSI) oscillates in the 20.00-40.00, suggesting that downside momentum is intact.

The Kiwi pair is expected to decline to near the October 2023 low at 0.5770 and the round-level support of 0.5700 after breaking below the intraday low of 0.5820.

On the contrary, an upside move above the November 15 high of 0.5970 will drive the asset toward the psychological figure of 0.6000 and the November 7 high of 0.6040.

NZD/USD daily chart

The New Zealand Dollar (NZD) is under mild downward pressure; it is likely to edge lower, possibly testing 0.5835 before the risk of a rebound increases. In the longer run, the underlying tone has softened, but any decline is likely part of a lower trading range of 0.5815/0.5905, UOB Group’s FX strategists Quek Ser Leang and Lee Sue Ann note.

NZD to test 0.5835 before the risk of a rebound increases

24-HOUR VIEW: “On Wednesday, NZD dropped to 0.5865. Yesterday, when NZD was at 0.5880, we were of the view that it ‘could retest 0.5865 before a rebound is likely.’ We indicated that ‘the strong support at 0.5850 is unlikely to come under threat.’ NZD weakened more than expected as it tested the 0.5850 support (low has been 0.5850). As downward momentum is increasing, NZD is unlikely to rebound. Instead, it is likely to edge lower, possibly testing 0.5835 before the risk of a rebound increases again. The next support at 0.5815 is unlikely to come under threat. Resistance is at 0.5875; a breach of 0.5885 would mean that the mild downward pressure has eased.”

1-3 WEEKS VIEW: “We highlighted two days (20 Nov, spot at 0.5910) that ‘upward momentum is beginning to build.’ We added, ‘Provided that NZD remains above 0.5850 (‘strong support’ level), it could rise gradually to 0.5960.’ Yesterday, NZD dropped to 0.5850. The buildup in momentum has dissipated. While the underlying tone has softened, any decline is likely part of a lower trading range of 0.5815/0.5905. In other words, NZD is unlikely to break clearly below 0.5815.”