Kiwi Dollar Struggles Near 0.60 as RBNZ Caution and Stronger USD Weigh on Outlook
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Daily Currency Update
Last week the New Zealand dollar (NZD) remained relatively flat but slightly softened versus the U.S. dollar. It began the week near 0.6003 USD on July 7, peaked around 0.60397 on July 10, before easing to 0.6004 by July 11, ending with a modest –0.46% weekly decline. Market drivers included the Reserve Bank of New Zealand’s decision on July 9 to hold the Official Cash Rate at 3.25%, which injected caution into NZD sentiment and led to a dip to near 0.5977. Overall, the kiwi traded in a tight 0.598–0.604 range, displaying mild weakness as global risk factors and US dollar strength offset short-term calm in domestic policy. Looking ahead this week and the NZD/USD is expected to remain range‑bound around the 0.5980–0.6020 corridor, with key technical and fundamental signals suggesting a cautious tone. Traders Union anticipates the pair hovering near 0.5994, with a possible swing between 0.5985 and 0.6014 during the coming week.Key Movers
Last week the U.S. dollar Index (DXY) posted a modest rebound, climbing from the sub‑97.0 area to close around 97.87 on July 11, marking approximately a +0.6% weekly gain. The dollar’s strength was driven by heightened risk aversion amid escalating trade‑tariff tensions and unexpected resilience in the U.S. labor market, with initial jobless claims falling below expectations . Despite still trading below longer-term highs, the index regained momentum in the latter part of the week, supported by diminishing odds of Fed rate cuts and firm economic data perception . Overall, the dollar ended the week solidly higher, posting its best performance since late February.U.S. stock markets ended slightly lower, reversing recent gains amid renewed global trade tensions. The Dow Jones Industrial Average led the declines with a drop of about 1%, snapping a three-week winning streak following President Trump’s announcement of new tariffs on imports from Canada, the EU, and Mexico. The S&P 500 slipped around 0.4% after touching record highs earlier in the week, while the tech-heavy Nasdaq fell approximately 0.2% as investor caution mounted despite continued strength in large-cap technology names. Small-cap stocks underperformed, with the Russell 2000 tumbling about 1.3% on Friday alone. Although corporate earnings remained largely upbeat, the market’s mood turned risk-averse due to trade policy uncertainty and speculation over future Fed policy, leading to a broadly cautious close for U.S. equities.
Expected Ranges
- NZD/USD: 0.5900 - 0.6100 ▲
- NZD/EUR: 0.5050 - 0.5250 ▲
- GBP/NZD: 2.2350 - 2.2550 ▼
- NZD/AUD: 1.0850 - 1.1050 ▼
- NZD/CAD: 0.8100 - 0.8300 ▲