New Zealand

In recent sessions, NZD/USD has posted an average variation of just under 0.4%, a relatively low level compared to moves above 1% seen in early February. This reflects the emergence of a consistent neutral bias in the pair’s short-term behavior.

Over the past five trading sessions, NZD/USD has shown a broad bearish bias, accumulating a decline of more than 1% as the Reserve Bank of New Zealand (RBNZ) prepares to announce its next policy decision. For now, the market expects additional rate cuts, which has limited the New Zealand dollar’s ability to regain strength against the U.S. dollar.

RBNZ holds rates at 3.25% as expected, though a dovish bias remains. NZD/USD and AUD/NZD test key resistance, setting up pivotal technical moves.

A souring global backdrop and surging crude have combined to put the squeeze on the New Zealand dollar. With key technical levels giving way and momentum turning bearish, near-term risks remain skewed to the downside.

The RBNZ's cash rate is now 35bp above the RBA's - its highest spread in 12 years. We're now eyeing a potential breakout on AUD/NZD, once the obligatory bull-traps which tends to plague forex markets plays out.

NZD/USD has risen towards resistance despite speculation that the RBNZ could cut their cash rate by 25bp tomorrow, from 5.5% to 5.25%. And not for the first time, money markets and economists disagree.

With traders keen to see who will be the first among the BOE, BOC or RBNZ to cut rates, their attention will be surely on next week's inflation reports for their respective regions.

Retail spending in New Zealand was unchanged in the September quarter after accounting for price movements, an improvement on the 1% drop reported in the prior three-month period than was a tenth larger than originally reported.

NZD/USD's break above 60c ahead of the RBNZ's announced that they held rates at 5.5% again was shortly lived, and momentum has turned decisively lower. Ans there could be further downside to come.

The RBNZ held their cash rate steady for the first time following 12 consecutive hikes, whilst AUD/USD broke above its 200-day MA ahead of a key US inflation report.

NZD pairs were lower after the RBNZ hiked for a 12th consecutive meeting and signalled they may have reached a peak rate of 5.5%. At least for now.

The RBNZ (Reserve Bank of New Zealand) are expected to hike by another 25bp tomorrow, despite 1 and 2-year inflation expectations plummeting at their fastest pace since the pandemic.