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

Further New Zealand Dollar (NZD) weakness appears likely; any decline may not reach the major support at 0.5850. In the longer run, likelihood of NZD dropping to 0.5850 has increased, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

NZD weakness appears likely

24-HOUR VIEW: “Yesterday, when NZD was at 0.5925, we held the view that NZD ‘is likely to trade with a downward bias towards 0.5900.’ We were also of the view that ‘a sustained break below 0.5900 is unlikely.’ The anticipated weakness exceeded our expectations, as NZD dropped to a low of 0.5876, closing at 0.5882 (-0.76%). Further weakness appears likely today, but oversold conditions suggest any decline may not reach the major support at 0.5850 (there is another support at 0.5865). On the upside, a breach of 0.5920 (minor resistance is at 0.5905) would mean that NZD is not weakening further.”

1-3 WEEKS VIEW: “We revised our view from neutral to negative yesterday (13 Nov, spot at 0.5925), indicating that ‘Despite the slight increase in momentum, the risk for NZD appears to have shifted to the downside.’ However, we noted that ‘it is too early to tell if the major support at 0.5850 is within reach.’ NZD subsequently dropped to 0.5876. The increase in momentum indicates that the likelihood of NZD dropping to 0.5850 has also increased. To maintain the buildup in momentum, NZD must remain below the ‘strong resistance’ at 0.5955 (level was at 0.5975 yesterday).”

• NZD/USD drops to over a three-month low as the USD buying remains unabated.
• The Trump trade optimism and elevated US bond yields lift the USD to the YTD top.
• Bets for aggressive RBNZ rate cuts and a potential US-China trade war weigh on Kiwi.

The NZD/USD pair prolongs its recent downward trajectory witnessed over the past week or so and drops to its lowest level since August 5, closer to mid-0.5800s on Thursday. Spot prices, however, rebound a few pips during the first half of the European session, though any meaningful recovery still seems elusive in the wake of broad-based US Dollar (USD) strength. 

Investors remain hopeful that US President-elect Donald Trump's policies will boost economic growth and the proposed plan to hike tariffs on imports could accelerate inflation. This, in turn, might force the Federal Reserve (Fed) to pause its easing cycle. Moreover, the US Consumer Price Index (CPI) released on Wednesday pointed to a slower progress toward bringing inflation down and could result in fewer rate cuts next year. This remains supportive of elevated US Treasury bond yields and lifts the USD to a fresh year-to-date (YTD) peak. 

The New Zealand Dollar (NZD), on the other hand, is undermined by rising bets for more aggressive interest rate cuts by the Reserve Bank of New Zealand (RBNZ). This, along with the disappointment over China's fiscal stimulus and looming US-China trade war, weighs on antipodean currencies, including the Kiwi, and contributes to the offered tone surrounding the NZD/USD pair. The downfall could further be attributed to some follow-through technical selling following the overnight sustained break and close below the 0.5900 round-figure mark.

This, in turn, suggests that the path of least resistance for the NZD/USD pair is to the downside and supports prospects for an extension of the recent sharp downfall from the YTD peak touched in September. Hence, any attempted recovery could be seen as a selling opportunity and runs the risk of fizzling out rather quickly. Traders now look to the US economic docket, featuring the usual Weekly Initial Jobless Claims and the Producer Price Index (PPI). This will be followed by Fed Chair Jerome Powell's speech, which should influence the USD.

• NZD/USD loses ground due to "Trump trades" and less dovish comments from Fed officials.
• Fed's Alberto Musalem stated that persistent inflationary pressures force the Fed to halt its rate-cutting strategy.
• RBNZ expects to deliver a bumper 75 basis point rate cut in November as the inflation rate eases.

NZD/USD extends its decline for the third consecutive day, trading near 0.5870, marking a three-month low during Thursday's Asian session. The pair's downward movement is largely due to the strengthening US Dollar (USD), fueled by "Trump trades" and less dovish remarks from Federal Reserve (Fed) officials following US inflation data. 

The US Dollar Index (DXY), which measures the value of the US Dollar against its six major peers, holds steady around 106.60, its highest level since November 2023, supported by rising US Treasury yields. At the time of writing, the 2-year and 10-year US Treasury yields are at 4.31% and 4.47%, respectively.

On Wednesday, St. Louis Fed President Alberto Musalem remarked that ongoing inflationary pressures make it challenging for the Fed to maintain a course of rate cuts. Musalem shifted focus to the robustness of the US labor market, aiming to ease concerns about inflation's resistance to the Fed's efforts to reduce it. Meanwhile, Kansas City Fed President Jeffrey Schmid emphasized the potential hurdles in the path toward lowering interest rates.

The US Consumer Price Index (CPI) rose by 2.6% year-over-year in October, matching market expectations, following a 2.4% increase in the previous month. Meanwhile, the core CPI, which excludes the more volatile food and energy sectors, climbed by 3.3%, in line with forecasts.

The Reserve Bank of New Zealand (RBNZ) is anticipated to announce a more substantial 75 basis point rate cut later this month as the inflation rate eases to its lowest level since Q1 2021 in the third quarter. A 50 basis point cut has already been fully priced in by markets.

However, the Food Price Index in New Zealand remained steady at 1.2% year-over-year in October, marking the highest level since February. On a monthly basis, food prices dropped by 0.9% in October, following a 0.5% increase the previous month.

Traders are now focusing on the upcoming US October Producer Price Index (PPI) data, scheduled for release on Thursday. Market participants are also looking ahead to the release of Industrial Production and Retail Sales data for October from China, New Zealand's largest trading partner, which is due on Friday.

• NZD/USD tumbled by 0.80% on Wednesday, currently trading around 0.5880.
• Pair continues moving towards August 5 lows around 0.5870.
• The RSI and the MACD both indicate that selling pressure is rising in the NZD/USD pair.

The NZD/USD pair extended its downtrend on Wednesday, declining by 0.8% to 0.5880, continuing its move towards the August 5 lows. The pair's overall momentum seems to be bearish, as indicated by both the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD).

The RSI, which measures overbought or oversold conditions, is around 33, indicating increasing selling pressure. The MACD, which measures trend strength and momentum, is red and rising, also suggesting a bearish outlook. The MACD histogram is also red and rising, further confirming the presence of the bearish forces. Although the RSI is currently oversold, which could potentially trigger a recovery, the overall technical outlook remains negative.

Resistance levels are seen at 0.5900, 0.5930, and 0.5950, and support levels at 0.5870, 0.5830, and 0.5815.

NZD/USD daily chart

The New Zealand Dollar (NZD) is likely to trade with a downward bias towards 0.5900; a sustained break below this level is unlikely. In the longer run, risk for NZD appears to have shifted to the downside; it is too early to tell if the major support at 0.5850 is within reach, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Major support at 0.5850 may be within reach

24-HOUR VIEW: “Our view for NZD to trade in a range between 0.5945 and 0.5985 yesterday was incorrect, as it dropped to 0.5911. NZD closed lower by 0.63% at 0.5927. There has been a slight increase in momentum, and NZD is likely to trade with a downward bias towards 0.5900 today. As conditions are approaching oversold levels, a sustained break below 0.5900 is unlikely. Resistance levels are at 0.5940 and 0.5955.”

1-3 WEEKS VIEW: “We highlighted on Monday (11 Nov, spot at 0.5965) that ‘The outlook is unclear after the sharp but short-lived swings.’ We were of the view that NZD ‘could trade in a broad range of 0.5915/0.6045 for now.’ Yesterday, NZD dipped slightly below 0.5915, reaching a low of 0.5911. Despite the slight increase in momentum, the risk for NZD appears to have shifted to the downside. However, it is too early to tell if the major support at 0.5850 is within reach. Note that there is another support at 0.5880. To maintain the buildup in momentum, NZD must remain below the ‘strong resistance’ level, currently at 0.5975.”

• NZD/USD may test the upper boundary of the descending channel near the nine-day EMA at 0.5961 level.
• The nine-day EMA staying below the 14-day EMA indicates persistent weakness in short-term price momentum.
• The pair may navigate the area around the lower boundary of the descending channel at 0.5860 level.

The NZD/USD pair holds ground after registering losses in the previous session, trading around 0.5920 during European hours on Wednesday. The daily chart analysis shows a strong bearish trend, with the NZD/USD pair moving downwards within a descending channel.

The nine-day Exponential Moving Average (EMA) remains below the 14-day EMA, indicating continued weakness in short-term price momentum. Additionally, the 14-day Relative Strength Index (RSI), a key momentum indicator, is below the 50 mark, reflecting sustained bearish momentum. A further decline toward the 30 level would amplify this downward trend for the NZD/USD pair.

On the downside, the NZD/USD pair may find support around the psychological level of 0.5900. A break below this level could increase selling pressure, pushing the pair toward the lower boundary of the descending channel at 0.5860, with further throwback support at the psychological level of 0.5850.

In terms of resistance, the pair faces an immediate hurdle at the upper boundary of the descending channel near the nine-day EMA at 0.5961, followed by the 14-day EMA at 0.5977. A break above the 14-day EMA would strengthen price momentum, potentially enabling the NZD/USD pair to approach the psychological level of 0.6100.

NZD/USD: Daily Chart

• NZD/USD holds steady around in Wednesday’s Asian session. 
• The US October CPI inflation report will be closely watched on Wednesday.
• Trump’s tariff plans might cap the upside for the Kiwi in the near term. 

The NZD/USD pair trades flat near 0.5930 during the Asian trading hours on Wednesday. However, the upside of the pair might be limited amid a strengthening of the US Dollar (USD). Traders brace for the US October Consumer Price Index (CPI) and Fedspeak later on Wednesday. 

The expectation that inflationary import tariffs from Republican President-elect Donald Trump would push up prices and leave the Federal Reserve's (Fed) less scope to cut interest rates boosts the USD broadly. However, the attention will shift to the CPI inflation report. The core gauge is expected to rise 0.3% MoM in October. Any signs of hotter inflation could further reduce the chance of a December easing, lifting the Greenback. On the other hand, the softer outcome could prompt traders to raise their bets on Fed rate reductions in December. 

"Focus is likely to shift back to inflation and Fed policy in the latter part of the week, but whether that brings an unwinding of Trump trades remains to be seen," noted Charu Chanana, chief investment strategist at Saxo.

The New Zealand Dollar (NZD) remains vulnerable as US President Donald Trump's trade policies, especially the specter of higher tariffs on China could weigh on the China-proxy NZD against the USD as China is a major trading partner for New Zealand. 

• NZD/USD fell 0.68% to 0.5925 on Tuesday.
• Pair resumed its downfall, hitting the lowest low since August 5.
• The near-oversold levels of the RSi might trigger an upwards correction.

The NZD/USD pair extended its decline on Tuesday, falling by 0.68% to 0.5925, hitting the lowest level since August 5. The downtrend has resumed, with technical indicators pointing to further weakness.

The Relative Strength Index (RSI) is approaching oversold territory near 30, suggesting that selling pressure is rising. Meanwhile, the Moving Average Convergence Divergence (MACD) indicates that buying pressure is declining, giving more evidence of a bullish weakness. The recent technical analysis of the NZD/USD pair suggests that the downtrend could continue, but mixed signals are present, indicating a potential for a recovery due to the oversold nature of the RSI.

Support levels around 0.5950, 0.5900, and 0.5850, and resistance levels at 0.6000, 0.6050, and 0.6100.

NZD/USD daily chart

The New Zealand Dollar (NZD) is expected to trade in a range between 0.5945 and 0.5985. In the longer run, outlook is unclear; NZD could trade in a broad 0.5915/0.6045 range for now, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

The next level to watch is 0.5915

24-HOUR VIEW: “After NZD fell sharply last Friday, we indicated yesterday that ‘The sharp decline has scope to extend to 0.5940 before stabilisation can be expected.’ We pointed out that NZD ‘is not expected to reach last week’s low, near 0.5915.’ Instead of declining further, NZD traded in a tight 0.5953/0.5977 range, closing largely unchanged at 0.5964 (-0.07%). Momentum indicators are turning flat, and NZD is expected to continue to trade in a range, probably between 0.5945 and 0.5985.”

1-3 WEEKS VIEW: “We highlighted yesterday (11 Nov, spot at 0.5965) that ‘The outlook is unclear after the sharp but short-lived swings.’ We were of the view that NZD ‘could trade in a broad range of 0.5915/0.6045 for now.’ We continue to hold the same view.”

• NZD/USD depreciates as the US Dollar receives support from Trump’s potential fiscal policies.
• The NZD struggles as the Trump administration may impose a 60% tariff on imports from China.
• Trump’s proposed fiscal policies could lead the Fed to adopt a more hawkish monetary policy.

The NZD/USD pair remains subdued near 0.5950 during European trading hours on Tuesday. Concerns are mounting that President-Elect Donald Trump’s expected tariff increases on Chinese goods could pressure the NZD, given New Zealand's close trade relationship with China.

Morgan Stanley’s analysis divides the Trump administration's macroeconomic policies into three primary areas: tariffs, immigration, and fiscal measures. The report anticipates that tariff policies will take precedence, with expectations for an immediate 10% tariff increase globally and a more substantial 60% increase targeting Chinese imports.

Adding to downward pressure on the NZD, China’s recent stimulus measures have underwhelmed investor expectations, weakening demand prospects for New Zealand's largest trading partner. Last week, China introduced a 10 trillion Yuan debt package but refrained from implementing direct economic stimulus measures, disappointing markets.

Meanwhile, the Reserve Bank of New Zealand (RBNZ) is anticipated to announce a more substantial 75 basis point rate cut later this month due to the significant time between meetings. A 50 basis point cut has already been fully priced in by markets.

The US Dollar (USD) continues to gain strength following the confirmation of Trump’s victory in the US election. Market analysts believe that Trump’s proposed fiscal policies could stimulate investment, spending, and labor demand, potentially heightening inflation risks. This could lead the Federal Reserve (Fed) to adopt a more hawkish monetary policy.

However, Federal Reserve Chair Jerome Powell stated on Thursday that he doesn’t anticipate Trump’s potential return to the White House impacting the Fed’s near-term policy decisions. “We don’t guess, speculate, and we don’t assume what future government policy choices will be,” Powell noted after the bank decided to lower interest rates by 25 basis points to a range of 4.50%-4.75%, as expected.

• NZD/USD softens to around 0.5960 in Tuesday’s Asian session. 
• The firmer USD continues to undermine the pair. 
• New Zealand’s two-year inflation expectations rose to 2.12% in Q4 vs. 2.03% prior. 

The NZD/USD pair extends the decline to near 0.5960 during the early Asian session on Tuesday. The New Zealand Dollar (NZD) weakens against the Greenback amid concerns about possible tariffs by Donald Trump's incoming administration. 

Economists expect Trump’s combination of proposed tariffs and tax cuts would put new pressure on inflation and balloon the deficit, making it more challenging for the US Federal Reserve (Fed) to cut the interest rates. According to the CME FedWatch Tool, the markets have priced in nearly 65.3% of the 25 basis points (bps) rate cut by the Fed at the December meeting, down from 75% last week. The odds that the Fed would hold rate steady stand at 34.7%. 

Investors await a slew of Fed speakers and the US October Consumer Price Index (CPI) data this week for fresh interest rate guidance. Any signs of hotter inflation might diminish the possibility of a December rate reduction, boosting the Greenback. 

On the Kiwi front, Donald Trump’s victory in the US elections has raised the specter of higher tariffs on China. This, in turn, could weigh on the China-proxy NZD against the USD as China is a major trading partner for New Zealand. 

New Zealand’s two-year inflation expectations inched higher to 2.12% in the fourth quarter, up from 2.03% in Q3, according to the Reserve Bank of New Zealand’s (RBNZ) latest monetary conditions survey on Monday. Expectations for one-year ahead annual inflation eased to 2.05% in Q4 from 2.40%. The RBNZ trimmed the Official Cash Rate (OCR) by 50 bps to 4.75% on November 27 and is expected to reduce rates by another 50 bps at the November 27 meeting. 

• NZD/USD declines on Monday, trades near 0.5960.
• Pair moved sideways while remaining significantly beneath 20-day SMA.
• The pair is exhibiting a mixed technical outlook, with the RSI indicating steady selling pressure and the MACD histogram showing declining buying pressure.

The NZD/USD pair traded neutrally on Monday, around 0.5960, and remains well below the 20-day Simple Moving Average (SMA). The pair's technical outlook is mixed, as the Relative Strength Index (RSI) indicates rising selling pressure while the Moving Average Convergence Divergence (MACD) histogram shows declining buying pressure. The overall momentum appears to be neutral, and the pair is likely to remain range-bound in the near term.

The technical indicators provide a mixed outlook for the NZD/USD pair. The RSI, a measure of momentum, is in negative territory and continues to decline, indicating that selling pressure is gradually increasing. The MACD histogram, which measures trend strength and direction, is also decreasing and green, suggesting that buying pressure is declining.

However, the pair trades within a narrow range with no clear direction, keeping the overall outlook neutral in the near term. The multiple rejections last week of the 20-day SMA paints the outlook with red, but the indicators and candles suggests that the pair is set to move sideways in the near term. 

NZD/USD daily chart

As long as 0.5955 is not breached, the New Zealand Dollar (NZD) could edge higher to 0.6075, UOB Group FX analysts Quek Ser Leang and Peter Chia note.

The next level to watch is 0.5955  

24-HOUR VIEW: “Yesterday, we highlighted that NZD ‘could drop to 0.5900 before the risk of a more sustained recovery increases.’ However, NZD rebounded from a low of 0.5933 to 0.6037, closing sharply higher by 1.41% at 0.6023. The sharp rebound appears to be running ahead of itself, and instead of continuing to advance, NZD is more likely to trade in a 0.5980/0.6040 range.”

1-3 WEEKS VIEW: “NZD dropped to a 3-month low of 0.5912 two days ago. Yesterday (07 Nov), when NZD was at 0.5935, we highlighted that ‘Although the increase in momentum indicates further NZD weakness, conditions remain oversold due to the recent month-long decline.’ We pointed out that ‘the potential of any weakness may be limited.’ We also pointed out that ‘as long as 0.6015 is not breached, NZD could drop to 0.5875 before a rebound is likely.’ We did not expect NZD to rebound so quickly and sharply, as it soared to 0.6037. Downward momentum has faded. Upward momentum is beginning to build, albeit tentatively. From here, as long as 0.5955 is not breached, NZD could edge higher to 0.6075. Currently, the chance of a sustained break above this level is not high.”

• NZD/USD tests the upper boundary of the descending channel near the nine-day EMA at 0.5980 level.
• The 14-day RSI remains below the 50 level; a further decline toward the 30 mark would strengthen bearish bias.
• The pair may depreciate toward the lower boundary of the descending channel at 0.5880 level.

The NZD/USD pair remains subdued for the second consecutive day, trading around 0.5960 during European hours on Monday. Analysis of the daily chart highlights a strong bearish bias, as the pair remains within a descending channel pattern.

The 14-day Relative Strength Index (RSI), a key momentum indicator, stays below the 50 level, indicating sustained bearish momentum. A further dip toward the 30 level would intensify this downward trend for the NZD/USD pair.

Additionally, the nine-day Exponential Moving Average (EMA) remains below the 14-day EMA, signaling continued weakness in short-term price momentum for the NZD/USD pair.

On the downside, NZD/USD may navigate the region around the psychological level of 0.5900, followed by the lower boundary of the descending channel at 0.5880 level. A break below the descending channel could strengthen the bearish bias and lead the pair to revisit the throwback support at the 0.5850 level.

Regarding the resistance, the NZD/USD pair finds an immediate barrier at the upper boundary of the descending channel at the nine-day EMA at 0.5980 level, followed by the 14-day EMA at 0.5994 level.

A break above the 14-day EMA would improve the price momentum and support the NZD/USD pair to explore the area around the psychological level of 0.6100 level.

NZD/USD: Daily Chart

• NZD/USD gains traction to near 0.5965 in Monday’s Asian session. 
• RBNZ two-year inflation expectations increase to 2.12% QoQ in Q4.
• Trump trades might lift the USD and cap the upside for NZD/USD. 

The NZD/USD pair rebounds to around 0.5965 on Monday during the Asian trading hours. The pair edges higher after an uptick in the Reserve Bank of New Zealand’s (RBNZ) inflation expectations. However, the renewed Greenback demand due to the return of Donald Trump to the White House might drag NZD/USD lower. The attention will shift to the US October Consumer Price Index (CPI), which is due on Wednesday. 

New Zealand’s two-year inflation expectations, seen as the time frame when RBNZ policy action will filter through to prices, increased slightly to 2.12% in Q4 from 2.03% recorded in Q3, according to the Reserve Bank of New Zealand’s (RBNZ) latest monetary conditions survey on Monday. Meanwhile, the NZ average one-year inflation expectations dropped to 2.05% in Q4 versus 2.40% prior. The New Zealand Dollar (NZD) attracts some buyers in the immediate reaction to the uptick in inflation expectations.

Nonetheless, analysts expect the US Dollar (USD) to continue its rally against its rivals as Trump’s plans might raise inflationary pressures and would lower the chances of sustained US Federal Reserve (Fed) rate cuts next year. "A Trump administration likely means more spending, a hotter economy, and high bars for international trade—all things that spell strength for the dollar," noted Helen Given, associate director of trading at Monex USA.

Additionally, the stronger US economic data continue to underpin the USD. The US consumer sentiment reached a seven-month peak in early November, as the University of Michigan’s Consumer Sentiment Index jumped to 73.0 from 70.5 in October. This figure beat the estimation of 71.0 and registered the highest reading since April. 

 

• The NZD/USD got rejected by the 20-day SMA by the fourth time this week.
• Technical indicators point to increasing selling pressure and decreasing buying pressure.
• A breakout from the 0.5940-0.6030 range will confirm a bearish outlook.

In Friday's session, the NZD/USD declined by 1.05% to 0.5960, continuing its downward trend as the pair got rejected by a third time this week by the 20-day Simple Moving Average (SMA).

The Relative Strength Index (RSI) is currently at 40 and in negative territory, indicating that selling pressure is rising. The RSI's slope is declining sharply, suggesting that selling pressure is increasing. The Moving Average Convergence Divergence (MACD) is also showing a mixed outlook, with the histogram being green but decreasing, indicating that buying pressure is declining.

The NZD/USD pair faced a third rejection from the 20-day Simple Moving Average (SMA), indicating strong selling pressure. This rejection has pushed the pair lower, suggesting that the downtrend is likely to continue. The multiple rejections of the 20-day SMA highlight the strength of the resistance level and the inability of buyers to break through it. As a result, traders can expect further downside momentum in the near term.

NZD/USD daily chart

Instead of continuing to advance, the New Zealand Dollar (NZD) is more likely to trade in a 0.5980/0.6040 range. In the longer run, upward momentum is building tentatively; NZD could edge higher to 0.6075, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

NZD likely to trade in a 0.5980/0.6040 range

24-HOUR VIEW: “Yesterday, we highlighted that NZD ‘could drop to 0.5900 before the risk of a more sustained recovery increases.’ However, NZD rebounded from a low of 0.5933 to 0.6037, closing sharply higher by 1.41% at 0.6023. The sharp rebound appears to be running ahead of itself, and instead of continuing to advance, NZD is more likely to trade in a 0.5980/0.6040 range.”

1-3 WEEKS VIEW: “NZD dropped to a 3-month low of 0.5912 two days ago. Yesterday (07 Nov), when NZD was at 0.5935, we highlighted that ‘Although the increase in momentum indicates further NZD weakness, conditions remain oversold due to the recent month-long decline.’ We pointed out that ‘the potential of any weakness may be limited.’ We also pointed out that ‘as long as 0.6015 is not breached, NZD could drop to 0.5875 before a rebound is likely.’ We did not expect NZD to rebound so quickly and sharply, as it soared to 0.6037. Downward momentum has faded. Upward momentum is beginning to build, albeit tentatively. From here, as long as 0.5955 is not breached, NZD could edge higher to 0.6075. Currently, the chance of a sustained break above this level is not high.”

• NZD/USD corrects to near 0.6000 as the US Dollar bounces back.
• Trump’s protectionist policies would keep the US Dollar’s downside limited.
• The RBNZ is expected to cut interest rates again by 50 bps.

The NZD/USD pair struggles to extend Thursday’s recovery move above 0.6050 and corrects to near the psychological support of 0.6000 in Friday’s European session. The Kiwi pair faces slight pressure as the US Dollar (USD) rebounds after a sharp correction on Thursday. The US Dollar Index (DXY), which gauges Greenback’s value against six major currencies, bounces back from 104.20.

The USD gains as market participants expect that US Donald Trump’s tight external policies would improve the overall productivity, business investment, and spending for the longer term. Trump promised to raise import tariffs by 10% universally, except China, which is expected to face even higher duties.

Meanwhile, the outlook of the New Zealand Dollar (NZD) remains weak as poor labor demand has solidified speculation of another Reserve Bank of New Zealand (RBNZ) larger interest rate cut in its policy meeting on November 27.

New Zealand Q3 employment data showed that the laborforce reduced by 0.5%, faster than estimates of a 0.4% decline. The Unemployment Rate rose to 4.8%, slower than estimates of 5% but was higher than 4.6% in the second quarter of this year.

NZD/USD encounters offers after a mean-reversion move to near the 20-day Exponential Moving Average (EMA), which trades around 0.6023. The 14-day Relative Strength Index (RSI) returns above 40.00, suggesting that the bearish momentum has faded. However, the bearish bias remains intact.

More downside is highly likely towards the round-level support of 0.5900 and the April 19 low at 0.5850 if the pair breaks below the October 31 low of 0.5940.

On the flip side, a further recovery above the October 23 high of 0.6058 will drive the asset toward the round-level resistance of 0.6100 and the October 8 high of 0.6146.

NZD/USD daily chart

• NZD/USD receives downward pressure due to the threat of Donald Trump’s tariffs on Chinese goods.
• The NZD may appreciate as traders expect more stimulus measures from China as the NPC Standing Committee concluded its meeting.
• Fed Chair Jerome Powell emphasized that the central bank will continue evaluating economic data to guide future rate decisions.

NZD/USD depreciates as the New Zealand Dollar (NZD) receives downward pressure from the concerns about Donald Trump’s proposals to raise tariffs on Chinese goods, given that New Zealand is a close trading partner to China. The NZD/USD pair trades around 0.6010 during the Asian session on Friday.

However, investors are hopeful about potential stimulus measures from China as the National People’s Congress Standing Committee concluded its five-day meeting. Any positive change in the Chinese economy could positively impact the New Zealand markets.

The slight improvement in the US Treasury yields provides support for the Greenback. The US Dollar Index (DXY), which measures the value of the US Dollar against the other six major currencies, improves to near 104.50 with 2-year and 10-year yields on US Treasury bonds standing at 4.20% and 4.33%, respectively, at the time of writing.

The NZD/USD pair rose by over 1% on Thursday after the Federal Reserve announced a 25 basis point cut to its benchmark overnight rate, setting a new target range of 4.50%-4.75% at its November meeting.

Federal Reserve Chair Jerome Powell highlighted that the US central bank will continue to monitor economic data to guide the "pace and destination" of future rate adjustments, noting that inflation is gradually easing toward the Fed’s 2% target. Investors are now focused on the upcoming preliminary US Michigan Consumer Sentiment report, due on Friday.