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

• NZD/USD weakens to around 0.6055 in Friday’s early Asian session. 
• The stronger US economic data on Thursday supports the Greenback. 
• Investors will monitor the Chinese GDP, Retail Sales and Industrial Production data, which are due on Friday. 

The NZD/USD pair remains on the defensive near 0.6055 during the early Asian session on Friday. The rising expectations for a smaller 25 basis points (bps) Federal Reserve (Fed) rate cut in November and stronger US economic data support the Greenback and weigh on the pair. Investors await the Chinese economic data on Friday, including Gross Domestic Product (GDP), Retail Sales and Industrial Production data for fresh impetus.  

The US September Retail Sales rose more than expected, and August figures were revised higher. Additionally, the weekly Initial Jobless Claims were unexpectedly declined. These encouraging reports have prompted traders to raise their bets that the Fed will cut rates gradually at its next several meetings, lifting the US Dollar (USD) against the Kiwi. 

“Strong data will encourage some pushback from Fed participants to cutting again in November, but Chair Jerome Powell is unlikely to be swayed from forging ahead with steady, quarter-point moves,” said Ellen Zentner at Morgan Stanley Wealth Management.

Data on Wednesday showed that New Zealand inflation eased to 2.2% YoY in the third quarter (Q3) from 3.3% in the previous reading. The figure moved back within the central bank’s 1% to 3% target band for the first time since early 2021. The Reserve Bank of New Zealand is anticipated to slash interest rates over the coming months, dragging the NZD lower. 

The upcoming Chinese economic data might offer some hints about the pace of growth in China, a major trading partner to New Zealand. Any signs of weakness in the Chinese economy might exert some selling pressure on the China-proxy Kiwi in the near term. 

The New Zealand Dollar (NZD) is likely to trade in a range between 0.6035 and 0.6090. In the longer run, NZD is likely to decline further; the level to watch is 0.6005, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Level to watch is 0.6005

24-HOUR VIEW: “NZD dropped sharply in early Asian trading yesterday. We indicated that “given the sharp increase in momentum, it is likely to decline further.” We also indicated that “the major support at 0.6005 is likely out of reach (there is another support at 0.6030).” Our view did not materialise as after dropping to 0.6041, it traded sideways for the rest of the sessions. Downward momentum has slowed, and NZD is unlikely to weaken much further. Today, it is more likely to trade in a range, probably between 0.6035 and 0.6090.”

1-3 WEEKS VIEW: “We continue to hold the same view as yesterday (16 Oct, spot at 0.6060). As highlighted, NZD is likely to decline further, and the level to watch is 0.6005. Overall, only a breach of 0.6115 (no change in ‘strong resistance’ level) would mean that the weakness in NZD that started early this month has stabilised.”

• NZD/USD attempts to remain within the descending channel pattern.
• If the 14-day RSI breaks below the 30 level, it would indicate an oversold territory and possibility of a short-term upward correction.
• The immediate resistance appears at the nine-day EMA at 0.6101 level, followed by the 50-day EMA at 0.6153 level.

The NZD/USD continues its losing streak for the fourth consecutive day, hovering around 0.6050 during Thursday's European trading session. The analysis of the daily chart shows that the pair attempts to remain within the descending channel pattern, signaling a continuation of the bearish trend.

The 14-day Relative Strength Index (RSI) approaches the 30 level, reinforcing the current bearish sentiment. A drop below this threshold would indicate that the NZD/USD pair is oversold, potentially leading to a short-term upward correction. Furthermore, the nine-day Exponential Moving Average (EMA) remains below the 50-day EMA, highlighting weakness in the short-term price trend for the pair.

In terms of support, if the NZD/USD pair successfully re-enters the descending channel, it may test the area around the lower boundary at the 0.5880 level, followed by the "pullback support" near the 0.5850 level.

On the upside, the immediate resistance is at the nine-day Exponential Moving Average (EMA) around the level of 0.6102, followed by the 50-day EMA at 0.6153 level. A break above these levels could shift the outlook to bullish, potentially allowing the NZD/USD pair to target the 16-month high of 0.6379, which was last reached on September 30.

NZD/USD: Daily Chart

• NZD/USD may face headwinds as the recent easing of inflation strengthens the case for the RBNZ’s rate cut in November.
• New Zealand's Consumer Price Index rose 2.2% YoY in the September quarter, bringing inflation within the RBNZ’s 1-3% target range.
• The US Dollar appreciates as strong US labor and inflation data have faded the odds of the Fed’s aggressive rate cuts.

NZD/USD breaks its three-day losing streak, trading around 0.6070 during the Asian hours on Thursday. However, the upside for the AUD/USD pair could be limited by recent data showing that inflation in New Zealand has slowed to its lowest level in over three years. This has increased the likelihood of the Reserve Bank of New Zealand (RBNZ) reducing interest rates at its next monetary policy meeting in November.

New Zealand's Consumer Price Index (CPI) rose 2.2% year-over-year in the September quarter, down from the 3.3% annual increase in the previous quarter. "For the first time since March 2021, annual inflation is within the Reserve Bank of New Zealand’s (RBNZ) target range of 1% to 3%. Prices are still increasing but at a slower rate than before," said Nicola Growden, consumer prices manager at Stats NZ.

Market participants are likely to remain cautious ahead of key economic data from China, New Zealand's top trading partner, scheduled for release on Friday. This includes GDP and Retail Sales data, following the recent disappointment in China's CPI and PPI figures.

The New Zealand Dollar (NZD) faced challenges as China's recently announced fiscal stimulus plan did little to lift market sentiment, as investors remain uncertain about the scale and impact of the package.

The US Dollar (USD) found support from strong labor and inflation data, which has tempered expectations for aggressive easing by the Federal Reserve (Fed). According to the CME FedWatch Tool, there is currently a 92.1% probability of a 25-basis-point rate cut in November, with no expectation of a larger 50-basis-point reduction.

Traders are keenly awaiting the US Retail Sales data, set to be released later in the North American session. Expectations are for monthly consumer spending to increase by 0.3% in September, up from 0.1% in the previous reading.

• The NZD/USD declined in Wednesday's session, continuing its bearish momentum.
• RSI has dropped to 34, indicating oversold conditions and rising selling pressure.
• MACD remains flat and red, suggesting a bearish trend with weakening selling pressure.

In Wednesday's session, the NZD/USD extended its recent decline, falling by 0.27% to 0.6050. The technical indicators remain bearish, indicating a continuation of the selling pressure that has dominated recent trading sessions.

The Relative Strength Index (RSI) has fallen into oversold territory, with a value of 34 and a sharply declining slope. This suggests that selling pressure is increasing and that the bears are gaining strength but that a correction might be in the horizon. The Moving Average Convergence Divergence (MACD) histogram is flat and red, indicating a bearish outlook. As long as the RSI remains below 50 and the MACD remains red, the technical outlook will remain bearish for the NZD/USD but sellers shouldn’t take off the table a healthy correction.

NZD/USD daily chart

The overall outlook for the NZD/USD remains bearish. The pair has been trading below key support levels for several sessions and has yet to show any signs of a recovery. The 0.6100 area where the 100 and 200-day Simple Moving Average (SMA) remains a key level to watch, as a consolidation below this level could open the door for a further decline towards 0.6000 while an upwards break of this level might trigger a recovery.

• NZD/USD sees more downside as soft NZ inflation has prompted RBNZ dovish bets.
• The US Dollar refreshes a two-month high as the Fed is expected to cut interest rates gradually.
• NZD/USD declines below the 200-day EMA.

The NZD/USD pair finds some buying interest after posting a fresh almost two-month low near 0.6040 on Wednesday. The near-term outlook of the Kiwi pair remains vulnerable as the New Zealand (NZ) Q3 Consumer Price Index (CPI) decelerated expectedly.

Annualized CPI rose by 2.2%, as expected, slower than 3.3% in the similar quarter of the previous year. Quarter-on-quarter inflation grew at a slower pace of 0.6% from the estimates of 0.7%, However, the pace was higher than 0.4% in the second quarter of the year.

Soft inflation data has prompted expectations that the Reserve Bank of New Zealand (RBNZ) could cut its Official Cash Rate (OCR) with a larger-than-usual size of 50 basis points (bps) for the second time in a row.

Meanwhile, the US Dollar (USD) posts a fresh two-month high as traders have priced out expectations that the Federal Reserve (Fed) would continue with a sizeable interest rate cut in November. According to the CME FedWatch tool, the Fed will cut its key borrowing rates by 25 bps in each of the two meetings remaining this year.

NZD/USD weakens after breaking below the horizontal support plotted from September 11 low of 0.6100 on a daily timeframe. The overall trend of the Kiwi pair has become bearish as it has formed a lower swing low. The asset is also trading below the 200-day Exponential Moving Average (EMA), which trades around 0.6100.

The 14-day Relative Strength Index (RSI) slides below 40.00, suggesting that a bearish momentum has been triggered.

More downside is highly likely towards the psychological support of 0.6000 and the August 15 low of 0.5974.

On the flip side, a reversal move above October 8 high of 0.6146 will drive the asset towards the 50-day EMA at 0.6173 and October 4 high near 0.6220.

NZD/USD daily chart

The New Zealand Dollar (NZD) is likely to decline further; the major support at 0.6005 is likely out of reach (there is another support at 0.6030). In the longer run, NZD is likely to decline further; the level to watch is 0.6005, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

NZD is likely to decline further

24-HOUR VIEW: “Yesterday, we expected NZD to consolidate in a range of 0.6070/0.6110. NZD then traded between 0.6074 and 0.6105, closing at 0.6083 (-0.23%). In early Asian trade today, NZD plummeted, and given the sharp increase in momentum, it is likely to decline further. That said, the major support at 0.6005 is likely out of reach (there is another support at 0.6030). Resistance levels are at 0.6080 and 0.6095.”

1-3 WEEKS VIEW: “We turned negative in NZD two weeks ago. As we tracked the subsequent decline, in our most recent narrative from last Thursday (10 Oct, spot at 0.6070), we highlighted, while the oversold weakness has not stabilised, NZD ‘must break and remain below 0.6050 before further sustained decline is likely.’ We added, ‘the probability of NZD breaking clearly below 0.6050 will remain intact as long as 0.6145 (‘strong resistance’ level) is not breached.’ At the time of writing in early Asian session today, NZD fell sharply. While the 0.6050 has not been clearly breached yet, the sharp increase in short-term momentum suggests NZD is likely to decline further. The level to watch is at 0.6005. On the upside, the ‘strong resistance’ level has moved lower to 0.6115 from 0.6145.”

• NZD/USD falls to a two-month low of 0.6039 following the inflation data release on Wednesday.
• New Zealand's CPI rose 2.2% YoY in the September quarter, falling within the RBNZ target range of 1% to 3%.
• Atlanta Fed President Raphael Bostic anticipates just one more interest rate cut of 25 basis points in 2024.

NZD/USD experiences a decline for the second consecutive day, trading around 0.6060 during Asian trading hours. The pair hit a two-month low of 0.6039 after the latest data showed that inflation in New Zealand has slowed to its lowest level in over three years.

In the September quarter, New Zealand's Consumer Price Index (CPI) rose 2.2% year-over-year, down from a 3.3% annual increase in the previous quarter. The CPI increased by 0.6% quarter-over-quarter in September, compared to a 0.4% rise in the June quarter, according to figures released by Stats NZ.

Nicola Growden, the consumer prices manager at Stats NZ, noted, “For the first time since March 2021, annual inflation is within the Reserve Bank of New Zealand’s (RBNZ) target range of 1% to 3%. Prices are still increasing but at a slower rate than before.”

The US Dollar (USD) receives support, bolstered by strong jobs reports and inflation data that have reduced expectations for aggressive easing by the Federal Reserve (Fed). As a result, markets are now forecasting a total of 125 basis points in rate cuts over the next year.

According to the CME FedWatch Tool, there is currently a 94.1% probability of a 25-basis-point rate cut in November, with no expectation of a larger 50-basis-point reduction.

On Tuesday, Federal Reserve Bank of Atlanta President Raphael Bostic stated that he anticipates just one more interest rate cut of 25 basis points this year, as reflected in his projections during last month's US central bank meeting. "The median forecast was for 50 basis points beyond the 50 basis points already implemented in September, according to Reuters.

The New Zealand Dollar (NZD) is likely to consolidate in a range of 0.6070/0.6110. In the longer run, oversold weakness has not stabilised, but NZD must break clearly below 0.6050 before further sustained decline is likely, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

NZD to consolidate in a range of 0.6070/0.6110

24-HOUR VIEW: “NZD traded between 0.6071 and 0.6102 yesterday, narrower than our expected consolidation range of 0.6065/0.6115. There has been no increase in either downward or upward momentum, and further consolidation seems likely. Expected range for today: 0.6070/0.6110.”

1-3 WEEKS VIEW: “Our update from last Thursday (10 Oct, spot at 0.6070) is still valid. As highlighted, while the oversold weakness has not stabilised, NZD ‘must break and remain below 0.6050 before further sustained decline is likely.’ The probability of NZD breaking clearly below 0.6050 will remain intact as long as 0.6145 (no change in ‘strong resistance’ level) is not breached. Looking ahead, if NZD were to break 0.6050, the next level to watch is 0.6005.”

Another commodity currency – the Kiwi dollar (NZD) – will face a CPI test today, ING’s FX strategist Francesco Pesole notes.

NZD can find buyers in the 0.6000-0.6050 region

“The Reserve Bank of New Zealand (RBNZ) cut by 50bp this month on the view that inflation has decisively turned lower while growth concerns are building. That is also the basis for markets high conviction call on another half-point reduction in December.”

“While headline CPI should move back close to the 2.0% target range mid-point, we see risks that non-tradeable inflation ends up coming in hotter than the RBNZ hopes. Ultimately, NZD may also get some help from inflation today, as markets may no longer be certain about a 50bp December move.”

“NZD/USD remains vulnerable to some Trump hedges ahead of the election, but an improved rate profile can help the Kiwi dollar find buyers in the 0.6000-0.6050 region.”

• NZD/USD edges lower as the US Dollar gains support from the fading likelihood of further bumper rate cuts by the Fed.
• Fed’s Kashkari reiterated the central bank’s data-dependent approach, highlighting the ongoing easing of inflationary pressures alongside a strong labor market.
• New Zealand’s Consumer Price Index is anticipated to return to the central bank's 1-3% target range for the September quarter.

NZD/USD halts its three-day winning streak, trading around 0.6080 during the Asian hours on Tuesday. This downside could be attributed to the stronger US Dollar (USD), which gains support from fading expectations that the US Federal Reserve (Fed) will implement aggressive interest rate cuts following a strong jobs report and concerns about sticky US inflation.

The US Dollar Index (DXY), which measures the value of the US Dollar against its six other major peers, extends its winning streak for the sixth consecutive day on Tuesday. The DXY trades around 103.30 with 2-year and 10-year standing at 3.96% and 4.09%, respectively, at the time of writing.

On Monday, Federal Reserve (Fed) Bank of Minneapolis President Neel Kashkari reaffirmed the Fed's data-dependent approach. Kashkari reiterated familiar Fed policymaker views on the strength of the US economy, noting continued easing of inflationary pressures and a robust labor market, despite a recent uptick in the overall unemployment rate, per Reuters.

The New Zealand Dollar (NZD) weakened following Monday’s disappointing trade balance data from China, New Zealand's largest trading partner. Additionally, despite the announcement of China’s fiscal stimulus plan over the weekend, the Kiwi Dollar did not gain traction, as investors remained uncertain about the extent of the package.

China's trade surplus narrowed in September, with the Trade Balance recorded at 81.7 billion, falling short of the 89.8 billion expected and down from the previous 91.02 billion. Exports increased by 2.4% year-over-year, significantly lower than the anticipated 6.0% and down from 8.7% in the prior period. Meanwhile, Imports grew by 0.3%, below the expected 0.9% and the previous increase of 0.5%.

Investors are likely anticipating the release of New Zealand's third-quarter inflation data on Wednesday. The Consumer Price Index (CPI) is expected to fall back within the central bank's 1-3% target range, decreasing to 2.2% year-over-year for the September quarter from the previous 3.3% reading.

The New Zealand Dollar is under downward pressure as markets anticipate an 80% likelihood that the Reserve Bank of New Zealand (RBNZ) will execute another half-point rate cut at its final meeting of the year in November.

• The NZD/USD declined to 0.6095, extending its recent downtrend.
• RSI is in negative territory and declining, while the MACD is flat and red.
• A break below 0.6100 could open the door for a further decline towards 0.6000.

In Monday's session, the NZD/USD pair extended its recent decline, falling by 0.30% to 0.6095. The technical indicators are also bearish, suggesting that the selling pressure is likely to continue if the buyers fail to sustain the 0.6100 area where the 200-day Simple Moving Average (SMA) converges.

The Relative Strength Index (RSI) is currently at 40, which is in negative territory and declining mildly. This suggests that selling pressure is increasing slightly and that the bears are in control of the market. The Moving Average Convergence Divergence (MACD) histogram is currently flat and red, indicating a bearish outlook. As long as the RSI remains below 50 and the MACD histogram remains red, the technical outlook will remain bearish for the NZD/USD.

NZD/USD daily chart

The overall outlook for the NZD/USD is bearish as the pair lost its 20-day Simple Moving Average (SMA) last week.The 200-day SMA at 0.6100 is providing some support, but a break below this level could open the door for a further decline towards 0.6000. On the upside, resistance can be seen at 0.6150 and 0.6200.

The New Zealand Dollar (NZD) is likely to consolidate in a range of 0.6065/0.6115. In the longer run, oversold weakness has not stabilised, but NZD must break clearly below 0.6050 before further sustained decline is likely, UOB Group’s FC analysts Quek Ser Leang and Lee Sue Ann note.

To consolidate in a range of 0.6065/0.6115

24-HOUR VIEW: “Last Friday, we were of the view that “further consolidation seems likely today, even though the slightly firmed underlying tone suggests a higher range of 0.6070/0.6120.” Our view turned out to be correct, as NZD traded between 0.6072 and 0.6119. We continue to expect NZD to consolidate, but this time around, the slightly soft underlying tone suggests a lower range of 0.6065/0.6115.”

1-3 WEEKS VIEW: “There is not much to add to our update from last Thursday (10 Oct, spot at 0.6070). As indicated, while the oversold weakness has not stabilised, NZD “must break and remain below 0.6050 before further sustained decline is likely.” The probability of NZD breaking clearly below 0.6050 will remain intact as long as 0.6145 (no change in ‘strong resistance’ level) is not breached. Looking ahead, if NZD were to break 0.6050, the next level to watch is 0.6005.” 

• NZD/USD faces challenges due to deflation concerns in China.
• The Kiwi Dollar receives downward pressure from safe-haven flows amid escalating geopolitical tensions.
• The Business NZ PSI came in at 45.7 for September, slightly better than the previous 45.5 reading.

NZD/USD depreciates after registering gains in the previous two sessions, trading around 0.6090 during the Asian trading hours on Monday. The New Zealand Dollar (NZD) receives downward pressure from the deflation fears in its largest trading partner China. Additionally, uncertainty surrounding Beijing's economic stimulus plans, which has raised concerns about the country’s demand undermines the Kiwi Dollar. Traders await Monday’s Trade Balance data from China for further impetus on the economic situation.

On Sunday, the National Bureau of Statistics of China reported that the country's monthly Consumer Price Index (CPI) held steady at 0% in September, against August’s increase of 0.4%. The annual inflation rate rose by 0.4%, falling short of the expected 0.6%. Meanwhile, the Producer Price Index (PPI) experienced a year-on-year decline of 2.8%, a larger drop than the previous decrease of 1.8% and surpassing expectations of a 2.5% decline.

The National People’s Congress expressed optimism after a briefing from China's Ministry of Finance (MoF) on Saturday. The ministry suggested plans to issue special bonds to support bank recapitalization and stabilize the real estate sector, although no specific figures were disclosed.

The risk-sensitive NZD/USD pair may have received downward pressure due to safe-haven flows amid rising geopolitical tensions. China's military initiated drills in the Taiwan Strait and around Taiwan on Monday. A spokesperson for the US Department of State expressed serious concern regarding the People's Liberation Army's (PLA) military actions.

In New Zealand, the Business NZ Performance of Services Index (PSI) recorded a value of 45.7 for September, a slight improvement from the previous reading of 45.5. Although this marks the highest level since May, the index still indicates contraction in the sector.

According to a press release from the Reserve Bank of New Zealand on Monday, Governor Adrian Orr highlighted the growing recognition across the financial system that more efforts are needed to improve Māori access to capital and participation in investment opportunities. Orr emphasized, "Improving Māori access to capital is a powerful enabler we all need to collectively prioritize."

The US Dollar (USD) appreciates due to rising expectations of the US Federal Reserve (Fed) slowing the pace of borrowing cost reductions more than previously anticipated. According to the CME FedWatch Tool, the markets are pricing in an 86.9% chance of a 25 basis point rate cut in November, with no expectation for a 50-basis-point reduction.

The New Zealand Dollar (NZD) is likely to consolidate between 0.6070 and 0.6120. In the longer run, oversold weakness has not stabilised, but NZD must break clearly below 0.6050 before further sustained decline is likely, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Bears to push towards 0.6050

24-HOUR VIEW: “Two days ago, NZD plummeted to a low of 0.6053. Yesterday, we indicated that ‘the sharp and swift decline appears to be overdone.’ We held the view that instead of weakening further, NZD ‘is more likely to consolidate between 0.6050 and 0.6100.’ Our view turned out to be correct, as NZD traded between 0.6050 and 0.6097. Further consolidation seems likely today, even though the slightly firmed underlying tone suggests a higher range of 0.6070/0.6120.”

1-3 WEEKS VIEW: “Our update from yesterday (10 Oct, spot at 0.6070) remains valid. As highlighted, the oversold in weakness has not stabilised, but NZD ‘must break and remain below 0.6050 before further sustained decline is likely.’ The probability of NZD breaking clearly below 0.6050 will remain intact as long as 0.6145 (no change in ‘strong resistance’ level) is not breached. Looking ahead, the next level to monitor below 0.6050 is 0.6005.”

The New Zealand Dollar (NZD) fell after RBNZ cut rate by 50bp. Pair was last at 0.6090, OCBC FX analysts Frances Cheung and Christopher Wong note.

Support comes in at 0.6060 and 0.60 levels

“MPC agreed that monthly price indices signal a continued decline in consumer price inflation. RBNZ also said that economic growth is weak, in part because of low productivity growth, but mostly due to weak consumer spending and business investment. These comments were well in line with what was earlier flagged in the NZIER’s quarterly survey of business opinions report.”

“Markets continue to expect about 50bp cut at the next MPC in Nov and another 100bp cut or so in 1H 2025. These were already priced in prior to the MPC. Dovish RBNZ may weigh on Kiwi for now but given that expectations are in the price, the downside for NZD may also be constrained.”

“Bearish momentum on daily chart intact while RSI is near oversold conditions. Support comes in at 0.6060 and 0.60 levels. Resistance at 0.61 (200 DMA), 0.6160 (50 DMA).”

• NZD/USD edges higher to near 0.6095 in Friday’s early Asian session.
• The US CPI inflation was higher than forecast in September, while jobless claims posted an unexpected rise. 
• The dovish stance of the RBNZ might cap the pair’s upside. 

The NZD/USD pair holds positive ground around 0.6095 during the early Asian session on Friday. However, the upside of the pair might be limited as firmer US September inflation lowers the odds of aggressive US Federal Reserve (Fed) cuts, which lift the Greenback. Investors await the Producer Price Index (PPI) and the preliminary Michigan Consumer Sentiment Index data, which are due later on Friday. 

The US inflation surprised on the upside in September, with the Consumer Price Index (CPI) rising 2.4% YoY in September, compared to 2.5% in the previous month. Meanwhile, the core CPI, Ex-food & energy price growth, jumped 3.3% YoY in September versus 3.2% prior, hotter than the 3.2% expected. The higher-than-expected inflation report might boost the Greenback and cap the upside for NZD/USD. 

The small upward surprise in September price growth is unlikely to prevent the Fed from additional interest rate cuts this year, but the odds of a 50 basis points (bps) reduction fell significantly after September's strong US Nonfarm Payrolls report last week. The markets are now pricing in nearly 83.3% possibility of 25 basis points (bps) Fed rate cuts in November, according to the CME FedWatch Tool.

New York Fed President John Williams said on Thursday that he expects more rate cuts lie ahead as inflation pressures continue to moderate and the economy remains solid. Meanwhile, Chicago Fed President Austan Goolsbee noted he sees a series of rate reductions over the next year to year and a half, noting that inflation is now near the Fed's 2% target, the economy is about at full employment, and the Fed's goal is to freeze those conditions in place.

However, Atlanta Fed President Raphael Bostic is open to the idea of skipping a rate cut in November if economic data still hasn't aligned with the Fed's target figures in time.

On the Kiwi front, the dovish stance of the Reserve Bank of New Zealand (RBNZ) might cap the pair’s upside in the near term. The markets bet on more aggressive easing in November. Swaps imply there are a further 45 bps of easing to come at the RBNZ's November meeting. However, the positive development surrounding the Chinese economy could lift the China-proxy New Zealand Dollar (NZD) as China is a major trading partner to New Zealand. 

The New Zealand Dollar (NZD) is likely to consolidate between 0.6050 and 0.6100. In the longer run, oversold weakness has not stabilised, but NZD must break clearly below 0.6050 before further sustained decline is likely, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

NZD must break below 0.6050 before a steady decline

24-HOUR VIEW: “Yesterday, we indicated that ‘tentative signs of slowing momentum combined with the still oversold conditions suggest NZD is likely to trade in a range.’ Our view of range trading was incorrect, as NZD plummeted to a low of 0.6053. The sharp and swift decline appears to be overdone. This, combined with tentative signs of slowing momentum, suggests NZD is unlikely to weaken much further. Today, NZD is more likely to consolidate between 0.6050 and 0.6100.”

1-3 WEEKS VIEW: “We turned negative in NZD last Wednesday (02 Oct, spot at 0.6285), indicating that ‘the pullback in NZD could potentially reach 0.6225.’ As NZD falls, we track the progress of the decline, and in our most recent narrative from Tuesday (08 Oct, spot at 0.6125), we indicated that NZD ‘still seems weak, but it remains to be seen if it has enough momentum to reach the next major support at 0.6075.’ Yesterday, NZD plummeted below 0.6075, reaching a low of 0.6053. While the weakness in NZD has not stabilised, conditions are severely oversold. To continue to decline in a sustained manner, NZD must break and remain below 0.6050. The probability of NZD breaking clearly below 0.6050 will remain intact as long as 0.6145 (‘strong resistance’ level previously at 0.6195) is not breached. Looking ahead, the next level to monitor below 0.6050 is 0.6005.”

• NZD/USD drifts higher to around 0.6090 in Thursday’s early Asian session. 
• Fed officials at their September meeting agreed to cut interest rates but were unsure how aggressive to get.
• The dovish outlook of the RBNZ weighs on the Kiwi. 

The NZD/USD pair attracts some buyers to near 0.6090 amid the consolidation of the Greenback during the early European session on Thursday. The upside of the pair might be limited as traders might turn cautious ahead of the US Consumer Price Index (CPI) inflation data, weekly Initial Jobless Claims and Fedspeak later on Thursday.

The Minutes from September 17-18 showed a "substantial majority" of the Federal Reserve (Fed) officials support a period of looser monetary policy with a significant half-point rate cut. However, there was even a broader consensus that this initial step would not lock the US central bank into any specific pace for future rate cuts. The rising expectation of a regular 25 basis points (bps) interest rate cut by the Fed in November provides some support to the US Dollar (USD). 
 
Inflation in the US, as measured by the CPI, is expected to see an increase of 2.3% YoY in September, down from a 2.5% rise in the previous reading. The core CPI inflation, which excludes volatile food and energy prices, is projected to stay unchanged at 3.2% YoY in the same period.

The Reserve Bank of New Zealand (RBNZ) decided to cut the Official Cash Rate (OCR) by 50 basis points (bps) from 5.25% to 4.75% at its October meeting on Wednesday, as widely expected. The Kiwi loses traction as markets bet on more aggressive easing in November. Swaps imply there are a further 45 basis points of easing to come at the RBNZ's November meeting.