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NZD/USD Rises despite Soft NZ InflationThe Reserve Bank of New Zealand kept rates at 5.5% last week, but adopted a softer tone compared to the hawkish messaging of the previous meeting, raising chances of a rate cut this year. Today’s soft inflation data help towards such action, since CPI eased to 3.3% in Q2 and the lowest in three years. Despite these prospects, NZD/USD contains its fall and rebounds today, as there is still a high bar for an RBNZ pivot. At the same time, the Fed may have adopted a cautious stance, but Chair Powell appears to be laying the groundwork for a September cut, as the disinflation trend has resumed, with markets pricing in three moves this year. The monetary policy dynamics are a bit murky, but likely support further upside. Having defended crucial technical levels, NZD/USD can regain the EMA200 (black line) and push for new monthly highs (0.6148), but we are cautious around greater advance 0.6223. But market bets for three cuts by the Fed are very aggressive and would require the Fed to move in three consecutive meetings. This optimism could be disappointed, just as prospects of an RBNZ pivot are strengthening. Below the EMA200, immediate bias is on the downside and risk of a breach of the 50% Fibonacci and the daily Ichimoku Cloud persists. This would make NZD/USD vulnerable t0 0.5952, but sustained weakness is not easy based on the monetary policy dynamics. Stratos Markets Limited (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. S tratos Europe Ltd (trading as “FXCM” or “FXCM EU”), previously FXCM EU Ltd (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Trading Pty. Limited (www.fxcm.com): Trading FX/CFDs carries significant risks. FXCM AU (AFSL 309763). Please read the Financial Services Guide, Product Disclosure Statement, Target Market Determination and Terms of Business at www.fxcm.com Stratos Global LLC (www.fxcm.com): Losses can exceed deposits. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this video are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed via FXCM`s website: Stratos Markets Limited clients please see: www.fxcm.com Stratos Europe Ltd clients please see: www.fxcm.com Stratos Trading Pty. Limited clients please see: www.fxcm.com Stratos Global LLC clients please see: www.fxcm.com Past Performance is not an indicator of future results.
by FXCM
NZ dollar can’t find its footingThe New Zealand dollar has posted sharp losses for a second successive day. NZD/USD is trading at 0.6042 in the North American session, down 0.54% on the day at the time of writing. The New Zealand dollar has declined 1.3% this week and is trading at its lowest level since May 15. New Zealand releases the second quarter inflation report early Wednesday. The market estimate stands at 3.5% y/y, compared to 4% in the first quarter. Quarterly, inflation is expected to remain steady at 0.6%. The inflation report will be a key factor in the Reserve Bank of New Zealand’s rate decision on August 14. The central bank stunned the markets with a dovish stance at last week’s rate meeting. The RBNZ held the cash rate at 5.5% as expected but left the door open to rate cuts if inflation falls as expected. The dovish pivot means that the August meeting will be live. At the previous meeting in May, the RBNZ discussed a rate hike but made a dramatic shift at the July meeting, noting that it was concerned the economy could be cooling faster than it had expected. US retail sales dipped to 2.3% y/y in June, down from 2.6% in May but higher than the forecast of 2.1%. Monthly, retail sales were unchanged in June, down from a revised 0.3% in May and matching the market estimate. This was the second time in three months that retail sales were unchanged, pointing to weakness in consumer spending. NZD/USD pushed below support at 0.6071 earlier. Below, there is support at 0.6024 There is resistance at 0.6160 and 0.6202
by OANDA
New Zealand dollar takes a tumble after RBNZ’s dovish toneThe New Zealand dollar is sharply lower on Wednesday. NZD/USD is trading at 0.6081 in the European session, down 0.72% on the day at the time of writing. The Reserve Bank of New Zealand held the cash rate at 5.50% at today’s meeting, the eight consecutive time it has maintained rates. No surprise there, but the rate statement was very dovish, which was completely unexpected. At the previous RBNZ meeting in May, policy makers projected that the Bank would not lower interest rates until the third quarter of 2025. Today’s meeting appears to signal a significant shift away from that hawkish stance. The heading of the policy statement was “Inflation Approaching Target Range”, in sharp contrast to the “Official Cash Rate to Remain Restrictive” in May. The statement noted that restrictive monetary policy had “significantly reduced consumer price inflation”, language which was more dovish than in the May statement. In the statement, the central bank acknowledged that policy would remain restrictive but added that this could change if, as expected, inflationary pressures eased. The markets viewed the statement as a signal that the RBNZ might lower rates much sooner than expected, perhaps as early as the August meeting. This has triggered sharp losses for the New Zealand dollar as lower interest rates makes the New Zealand currency less attractive to investors. The money markets have raised the possibility of an August rate cut to 60%, sharply higher than 33% prior to the rate decision. The inflation report for the second quarter, which will be released next Wednesday, will be a critical factor in the RBNZ rate decision in August. NZD/USD has pushed below support at 0.6114 and is testing support at 0.6079. Below, there is support at 0.6013 0.6180 and 0.6215 are the next lines of resistance
by OANDA
NZDUSD: Profit taking into RBNZ decisionNZDUSD – technical overview Overall pressure remains on the downside with the market continuing to stall out on runs up into the 0.6500 area. At the same time, there are some signs of the market wanting to put in a longer-term base. Ultimately, a break back above 0.6500 would be required to take the medium-term pressure off the downside and encourage this prospect. A monthly close below 0.5800 will intensify bearish price action. R2 0.6222 – 12 June high – Strong R1 0.6200 – Figure – Medium S1 0.6048 – 2 July low – Medium S2 0.6031 – 15 May low – Strong NZDUSD – fundamental overview There is no change expected from the RBNZ today, though we have seen profit taking into the event risk. We've also seen some Kiwi selling on the New Zealand Treasury's reporting of weaker sales, with consumers experiencing hardship. Absence of first tier data on Wednesday’s calendar will leave the focus on another round of Fed Chair testimony and some Fed speak. Exclusive FX research from LMAX Group Market Strategist, Joel Kruger
by BlackBull_Markets
NZD edges lower ahead of RBNZ decisionThe New Zealand dollar is steady on Tuesday. NZD/USD is trading at 0.6115, down 0.16% in the European session at the time of writing. The New Zealand dollar looked sharp last week against the slumping US dollar, climbing 0.88%. The Reserve Bank of New Zealand is expected to hold its cash rate at 5.50% for an eighth straight time when its meets early on Wednesday. The RBNZ has been unwilling to shift away from its ‘higher for longer’ stance, despite the worsening economic downturn. The services and manufacturing sectors are both showing contraction and consumer and business confidence has been weak. The economy posted annual growth of only 0.3% in the first quarter after two quarters of contraction, which is a technical recession. The weak New Zealand economy badly needs a rate cut to kick-start growth, but the RBNZ’s first priority is to bring inflation back down to the target band of 1% to 3%, preferably around the 2% midpoint. Inflation eased from 4.7% to 4.0% in the first quarter but this is still above the target band. What can we expect from the central bank? With a rate hold widely expected at Wednesday’s meeting, the focus will be on the tone of the rate statement. At the previous meeting in May, the RBNZ projected that it wouldn’t lower rates until the third quarter of 2025 and the economy may have worsened since then, which could delay a rate cut even further. I expect that the message from Wednesday’s meeting is that rates will not drop before the inflation picture improves and the RBNZ could warn that rate hikes remain on the table. NZD/USD is testing support at 0.6114. Below, there is support at 0.6079 0.6180 and 0.6215 are the next lines of resistance
by OANDA
Bearish Signals Intensify for NZDUSD Below 0.5800NZDUSD – technical overview Overall pressure remains on the downside with the market continuing to stall out on runs up into the 0.6500 area. At the same time, there are some signs of the market wanting to put in a longer-term base. Ultimately, a break back above 0.6500 would be required to take the medium-term pressure off the downside and encourage this prospect. A monthly close below 0.5800 will intensify bearish price action. R2 0.6083 – 10 April high – Strong R1 0.5985 – 29 April high – Medium S1 0.5852 – 19 April 2024 low – Medium S2 0.5800 – Figure – Medium NZDUSD – fundamental overview RBNZ Governor Orr and Deputy Governor Hawkesby spoke earlier in the session before a parliamentary committee as part of their scheduled Financial Stability Report briefing. Hawkesby said that while there had been an increase in the proportion of non-performing loans, this had been "largely as predicted six months ago," and "provisions hadn't risen or weren't projected to rise as far as they had." On the data front, New Zealand building permits were balanced on the whole. Key standouts on Thursday’s calendar come from German and Eurozone manufacturing PMIs, Canada trade, US trade, US initial jobless claims, and US factory orders. Exclusive FX research from LMAX Group Market Strategist, Joel Kruger
by BlackBull_Markets
NZDCAD: Policy Divergence Favoring the KiwiHello Traders, In today's trading session, we are keeping a close watch on NZDCAD for a promising buying opportunity around the 0.83900 level. After experiencing a prolonged downtrend, NZDCAD has successfully broken out and is currently in a correction phase. This correction is bringing the pair closer to a critical support and resistance zone at 0.83900, making it a prime area for potential buy entries. The ongoing policy divergence between the Reserve Bank of New Zealand (RBNZ) and the Bank of Canada (BoC) adds an extra layer of favorability for the NZD over the CAD. The RBNZ's more accommodative stance compared to the BoC's policies provides a supportive backdrop for the NZD, further bolstering the case for a buying opportunity at this level. Trade safely, Joe
Long
by JoeChampion
3
NZD/CAD: Capitalizing on RBNZ Stability and BoC DovishnessHello Traders, In the coming week, we are closely monitoring NZD/CAD for a potential buying opportunity around the 0.84090 zone. NZD/CAD is currently trading in an uptrend and is undergoing a correction phase, bringing it closer to the key support and resistance area at 0.84090. This level has historically served as a significant pivot point for price action, making it an attractive entry point for long positions. From a fundamental perspective, the Reserve Bank of New Zealand (RBNZ) is maintaining a steady stance and is not looking to cut rates anytime soon. In contrast, the Bank of Canada (BoC) seems to be on pace to cut rates, given the easing inflationary pressures in Canada. This divergence in monetary policy favors the NZD over the CAD, adding strength to our bullish outlook on NZD/CAD. Additionally, the overall bullish sentiment in the stock market could further benefit NZD/CAD due to the positive correlation between risk-on environments and NZD strength. This confluence of technical and fundamental factors makes the 0.84090 zone a strategic area to look for buying opportunities in NZD/CAD. Trade safely, Joe
Short
by JoeChampion
11
Kiwi Upside Bias Strengthened after Hawkish RBNZThe Reserve Bank of New Zealand delivered a hawkish hold on Wednesday, as it raised the OCR forecast to 5.7%, leaving room for further tightening. Policymakers believe that longer restriction may be needed to achieve the 1-3% inflation target and also upgraded their forecast, expecting CPI to fall less and slower than previously thought. The US Fed meanwhile has adopted a cautious stance towards removing monetary restraint, due to stubborn inflation this year, strong economy and robust labor market. The central bank is still widely expected to lower rates this year though. Most commentary - including from Chair Powell - has dismissed prospects of rate hikes, pointing to the need that sustained restrictive stance to control inflation. The monetary policy differential favors the Kiwi, since RBNZ has kept more tightening in play, whereas its US counterpart has hinted to cuts. NZD/USD is on the driver’s seat with the ability to tackle 0.6219, although news 2024 highs, but further gains towards 0.6412 have higher degree of difficulty. On the other hand, the Fed’s apprehension provides support to the greenback and this can create pressure back toward the EMA200 (black line). Daily closes below it would pause the upside bias, but sustained weakness below it does not look easy – fundamentally and technically as the daily Ichimoku looms. Stratos Markets Limited (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Europe Ltd (trading as “FXCM” or “FXCM EU”), previously FXCM EU Ltd (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Trading Pty. Limited (www.fxcm.com): Trading FX/CFDs carries significant risks. FXCM AU (AFSL 309763). Please read the Financial Services Guide, Product Disclosure Statement, Target Market Determination and Terms of Business at www.fxcm.com Stratos Global LLC (www.fxcm.com): Losses can exceed deposits. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this video are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed via FXCM`s website: Stratos Markets Limited clients please see: www.fxcm.com Stratos Europe Ltd clients please see: www.fxcm.com Stratos Trading Pty. Limited clients please see: www.fxcm.com Stratos Global LLC clients please see: www.fxcm.com Past Performance is not an indicator of future results.
Long
by FXCM
Missed the NZD trade? What's next? As expected, the Reserve Bank of New Zealand (RBNZ) kept interest rates unchanged yesterday but did provide some surprises to the market; extending the timeline for a potential rate cut, and even noted its consideration of a rate hike. This unexpectedly hawkish stance sent the NZDUSD higher. Before the announcement, markets saw an ~80% chance of a rate cut by November, but this probability has now dropped to ~50%. Despite this, bullish momentum seemed capped. After probing above 0.6117 several times (with diminishing conviction), buyers turned into sellers. Governor Orr's comments during the post-decision press conference were perceived as slightly less hawkish, which helped push the price back down. Additionally, over in the US, minutes from the two-day Federal Open Market Committee meeting ending May 1 showed that while participants felt the policy was “well positioned,” several officials expressed a willingness to tighten policy further if necessary. If the price declines, the next key target could be the 100-day moving average at 0.60712, which coincides with a 50% Fibonacci retracement level. However, support is potentially located at .6083 before this, with resistance kicking in at the session high above .6150.
by BlackBull_Markets
Policy Divergence: BoC and RBNZ Take Opposing PathsGreetings Traders, In today's trading session, our focus is on NZDCAD, where we see a promising buying opportunity emerging around the 0.83500 zone. NZDCAD has been traversing a downtrend but is currently undergoing a correction phase, drawing nearer to the retrace area near the 0.83500 support and resistance zone. Adding depth to our analysis, recent fundamental developments are worth noting. Just yesterday, the Canadian CPI figures came in softer than anticipated. Meanwhile, during the night, the Reserve Bank of New Zealand (RBNZ) issued some notably hawkish guidance. This sets an interesting stage: while the Bank of Canada (BoC) is poised to initiate rate cuts come June, the RBNZ appears to be steering clear of such measures for the time being. This subtle policy divergence introduces a compelling dynamic that suggests NZDCAD may continue its upward trajectory. In summary, the confluence of technical retracement and fundamental policy disparities presents an opportune moment for traders to consider a bullish stance on NZDCAD.
Long
by JoeChampion
NZD/USD steady ahead of RBNZ rate announcementThe New Zealand dollar is almost unchanged on Tuesday. NZD/USD is down 0.06%, trading at 0.6102 in the European session at the time of writing. The Reserve Bank of New Zealand has shown it can be patient, having held the cash rate at 4.35% for six straight times. The central bank is expected to maintain rates yet again at Wednesday’s meeting as inflation has remained stubbornly high. Inflation has been moving lower and fell to 4% in the first quarter, down from 4.7% in the fourth quarter of 2023. However, this remains double the midpoint of the 1-3% target range and is too high for the RBNZ to start trimming rates in the near-term. At the same time, economic data for the first quarter was soft which should result in disinflation. The unemployment rate rose to 4.3% in the first quarter, private wage growth decelerated and GDP contracted by 0.1% q/q. The RBNZ had its mandate limited to inflation in December; previously, the central bank was mandated to maintain low inflation and full employment. Still, the strength of the labor market and wage growth will be eyed by the central bank as it determines its rate policy. The Federal Reserve continues to sound hawkish about rate policy and remains cautious about rate cuts. On Monday, Fed Vice Chair Philip Jefferson said that it was too early to tell if the downtrend in inflation would be “long lasting”. Fed Vice Chair of Supervision Michael Barr said that first-quarter inflation data was disappointing and was not supportive of easing monetary policy. For a second straight day, there are no US economic releases and we’ll hear from a host of FOMC members, which could provide insights about the Fed’s rate policy plans. NZD/USD is tested support at 0.6089 earlier . Below, there is support at 0.6039 0.6185 and 0.6235 are the next resistance lines
by OANDA
Continuation for Kiwi Ahead Of RBNZ?Kiwi showed a robust continuation candle last week on the daily chart. The price recovered above the 0.6085 resistance level and finished the week above the 0.61 area, suggesting a potential continuation pattern unfolding in the middle of an impulsive recovery. This week, the Bank of New Zealand's interest rate decision is anticipated, and they are not expected to implement any cuts this year. Their relatively "not dovish" stance might keep the pair in recovery mode, especially considering the recent downside movement in US yields that was bullish for USD, and the positive performance of stocks. Higher stock prices and risk-on flows could be supportive for Kiwi. A closer look at the Elliott wave structure indicates the possibility of at least one more push higher, potentially reaching up to the 0.6200 area for wave C/3.
Long
by ew-forecast
NZ dollar climbs ahead of RBNZ rate decisionThe New Zealand dollar has posted considerable gains on Tuesday. In the North American session, NZD/USD is trading at 0.6065, up 0.54% and its highest level since March 21. The Reserve Bank of New Zealand meets early on Wednesday and it’s practically a given that it will hold the cash rate at 5.5%. This would mark the sixth straight time that the RBNZ maintains rates and prolongs its “higher for longer stance”. Investors will be interested in whether the RBNZ pushes back against market expectations of rate cuts – investors have priced in two cuts with a 70% probability of a third this year. The decision will not include updated economic forecasts or a news conference with Governor Orr, which could limit New Zealand dollar volatility around the meeting. The markets are being aggressive in their pricing of rate cuts, mainly due to a weak economy, as GDP has contracted in four of the past five quarters. However, high inflation is a key reason why the RBNZ is hesitant to signal rate cuts are coming. In the fourth quarter, the inflation rate was 4.7%, well above the upper limit of the 1-3% target band. New Zealand releases first-quarter CPI next week, and the release will be a key factor in the central bank’s rate policy. The RBNZ would prefer to have the Federal Reserve cut rates first, as this would boost the New Zealand dollar and weigh on inflation. The Fed has signaled rate cuts are coming but stronger than expected data, such as last week’s nonfarm payrolls, may lead the Fed to delay lowering rates. NZD/USD is testing resistance at 0.6060. Above, there is resistance at 0.6107 0.6000 and 0.5953 are providing support
by OANDA
New Zealand dollar calm ahead of RBNZ rate decisionThe New Zealand dollar is trading quietly on Tuesday. In the European session, NZD/USD is trading at 0.6165, down 0.12%. All eyes are on the Reserve Bank of New Zealand, which will set the cash rate on Wednesday. The central bank is expected to hold rates at 5.50% for a sixth straight time. Most of the major central banks are looking to lower interest rates but the RBNZ is an outlier in that regard, warning that it could raise rates and the markets have price in a rate hike at Wednesday’s meeting at around 25%. The central bank finds itself in an uncomfortable position of high inflation coupled with weak growth. Inflation is running at a 4.7% clip, well above the 1%-3% target band. A rate hike would help push inflation lower but is risky in a weak economic climate as the economy could tip into a recession. Last week, retail sales for the fourth quarter fell by 1.9%, lower than expected and marking an eighth consecutive quarter of decline. GDP growth contracted in the third quarter by 0.3% and a second straight quarter of negative growth would meet the definition of a technical recession. RBNZ policy makers have pushed back against market expectations of a rate cut this year, insisting that it won’t lower rates until 2025. We can expect a hawkish message from the central bank at Wednesday’s meeting, even if the Bank decides to maintain rates at their current level. There is resistance at 0.6180 and 0.6236 0.6141 and 0.6085 are providing support
by OANDA
New Zealand dollar rises to five-week high, retail sales nextThe New Zealand dollar continues to gain ground and has extended its gains for a seventh straight day. In the North American session, NZD/USD is trading at 0.6187, up 0.12%. The New Zealand dollar last had a losing daily session on February 13 and has jumped 2.1% since then. New Zealand consumer spending has been weak and more bad news is expected on Friday, when retail sales for the fourth quarter will be released. Retail sales slipped 3.4% y/y in Q3 and the markets are bracing for another sharp decline of 3.6%. On a quarterly basis, retail sales haven’t shown a gain since Q3 of 2022 and the market estimate stands at 0.4%. The Reserve Bank of New Zealand will be keeping a close eye on the release, which is the last tier-1 event ahead of the policy meeting on February 28th. The minutes of the Fed’s January meeting didn’t contain any surprises. Fed members remained concerned about lowering interest rates too early and questioned “how long a restrictive monetary policy stance would need to be maintained”.  In other words, the “higher for longer” stance will remain in place for now. The most important consequence of this policy is that a March cut is off the table, with only a 5% likelihood, according to the CME’s FedWatch tool. The Fed’s uneasiness about lowering rates too early was reiterated by Fed Governor Michelle Bowman on Wednesday. Bowman said that the current economic climate was not conducive to a rate cut. Bowman has been hawkish on inflation and said last month that she would consider raising rates if inflation stalled or reversed and moved higher. NZD/USD tested resistance at 0.6211 earlier. Above, there is resistance at 0.6270 0.6168 and 0.6109 are providing support
by OANDA
New Zealand dollar rises on strong services dataThe New Zealand dollar continues to gain ground and has extended its gains for a fourth straight day. In the North American session, NZD/USD is trading at 0.6149, up 0.44%. New Zealand’s BusinessNZ Performance of Services Index improved to 52.1 in January from 48.8 in December, above the forecast of 49.6. This put the index in expansion territory and marked the highest pace of activity since July 2023. The 50 level separates contraction from expansion. This is welcome news for the economy, which has cooled down due the Reserve Bank of New Zealand’s steep rate-tightening cycle. Is the RBNZ done with raising rates? The markets think so and have priced a rate cut for the middle of the year. The central bank has been more cautious and has pushed back against these expectations. Governor Orr’s said last week that inflation expectations remain too high, the latest salvo aimed at dampening rate cut speculation. At its last meeting in November, the RBNZ said it hadn’t ruled out a rate hike and projected no rate cuts before mid-2025. New Zealand’s inflation rate is running at 4.7%, more than double the midpoint of the 1%-3% target range. The RBNZ is unlikely to trim rates until inflation falls much closer to 2% and unless inflation drops dramatically, a rate before late in the year is looking doubtful. The RBNZ meets next on February 28th and is expected to keep rates unchanged for a fifth straight time. NZD/USD is putting pressure on resistance at 0.6168. Above, there is resistance at 0.6211 0.6109 and 0.6066 are providing support
by OANDA
New Zealand job growth expected to reboundThe New Zealand dollar is showing limited movement on Tuesday. Early in the North American session, NZD/USD is trading at 0.6052, down 0.03%. New Zealand releases the fourth-quarter employment report later today. Employment is expected to rebound with a 0.3% gain, after a decline of 0.2% in the third quarter, which was the first decline in over three years. The unemployment rate is expected to rise to 4.2%, up from 3.9% in the third quarter. The Reserve Bank of New Zealand will be keeping a close eye on the job numbers as it charts its rate path. The RBNZ has kept the cash rate unchanged at 5.5% for five straight times, which likely means that its steep rate-tightening cycle has run its course. That has the markets hunting for clues of a rate cut, which is expected later in the year. At the most recent meeting in late November, the RBNZ had a hawkish message for the markets, warning that inflation remained too high and if it rose unexpectedly, the central bank would "likely need to increase further". I'm doubtful that the RBNZ is really planning to raise rates, barring a shock where inflation moves higher. The RBNZ's aim may be to pour cold water on rate-cut expectations and allow high rates to continue to push inflation lower. If key data such as the upcoming employment report are solid, it will provide the RBNZ with more room to continue to keep rates in restrictive territory. Conversely, weak job numbers would raise pressure on the RBNZ to lower rates in order to boost economic growth. NZD/USD is putting pressure on resistance at 0.6150. Above, there is resistance at 0.6211 There is support at 0.6054 and 0.5993
by OANDA
NZD/USD eyes RBNZ rate meetingThe New Zealand dollar posted slight gains earlier on Tuesday but has recovered. In the European session, NZD/USD is trading at 0.6101, up 0.07%. The Reserve Bank of New Zealand meets on Wednesday and is likely to maintain the cash rate at 5.5% for a fourth straight time. The central bank's stance appears to be one of "higher for longer", which will provide policy makers the flexibility to raise or lower rates as needed. The RBNZ's stance does not dovetail with the market view that rate cuts could come as early as May 2024. Inflation is falling and the labor market is slowing down, and the markets are betting that this trend will continue and allow the RBNZ to trim rates. This makes Wednesday's meeting quite interesting, not so much as to the rate decision but to how strongly Governor Orr pushes back against market expectations of rate cuts. The RBNZ said in October that rates might need to stay higher for longer in order to bring inflation back down to the 1%-3% target, but a more forceful message may be needed to send the message that rate cuts are not around the corner. Orr's press conference and updated forecasts will be opportunities to counter market expectations and present a hawkish stance on rate policy. The US releases Conference Board Consumer Confidence later today. Consumer confidence has been falling and the downtrend is expected to continue, with a market consensus of 101.0, down from 102.6. We'll also hear from a host of Fed members during the day, which could provide some insights into the Fed's plans for the December meeting. NZD/USD is putting pressure on resistance at 0.6121. Above, there is resistance at 0.6167 There is support at 0.6053 and 0.5996
by OANDA
NZD/USD rises ahead of retail salesThe New Zealand dollar is in positive territory on Thursday. Early in the North American session, NZD/USD is trading at 0.6042, up 0.34%. Retail sales are a key gauge of consumer spending and the New Zealand consumer has been holding tightly to the purse strings. In the second quarter, retail sales fell 1% q/q, with most retail industries showing lower sales volumes. This marked a third consecutive losing quarter. The markets are bracing for another decline for Q3, with a consensus estimate of -0.8%. The soft retail sales data isn't really surprising as consumers are being squeezed by high inflation and elevated borrowing costs. The decrease in household purchasing power has meant a decline in spending. High interest rates are still filtering through the economy, which could further dampen consumer spending in the fourth quarter. The Reserve Bank of New Zealand has put a pause on rates for three straight times, which has naturally raised speculation that the central bank has completed its tightening cycle, which has brought the cash rate to 5.5%. Inflation in the third quarter eased from 6.0% to 5.6% y/y in the third quarter and this decline means that there is a strong likelihood that the RBNZ will hold rates at the November 27th meeting. US markets are closed for the Thanksgiving holiday, which means we're unlikely to see much movement today with the US dollar. That could change on Friday, with the release of US manufacturing and services PMIs. The consensus estimates for November stand at 49.8 for manufacturing (Oct: 50.0) and 50.4 for services (Oct. 49.8). If either of the PMIs miss expectations, that could translate into volatility from the US dollar. NZD/USD Technical NZD/USD is putting pressure on resistance at 0.6076. The resistance line 0.6161 There is support at 0.5996 and 0.5885
by OANDA