Home Daily Commentaries NZD forced back below US$0.59 as USD rebounds and bond market cools

NZD forced back below US$0.59 as USD rebounds and bond market cools

Matt Richardson
Written by
Matt Richardson

Matt Richardson

OFXpert

Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange.

| Friday 23 May, 2025

Daily Currency Update

Much like its antipodean counterpart the NZD edged lower Thursday, yet remained within its recent narrow range amid a US dollar rebound. The NZD slipped back below US$0.59 overnight after stronger than expected US PMI data helped alleviate fears surrounding the US debt burden and budget deficit. Despite the House of Representatives passing President’s Trumps flagship tax bill, a root cause of bond market uncertainty, risk sentiment improved as PMI numbers suggest the economy is more resilient than anticipated. With the USD on the front foot, the NZD failed to extend through resistance. The NZD has been well contained through the last 30 days bouncing between US$0.5850 and US$0.60, with ranges narrowing further this last week.

Our attentions turn now to domestic retail sales data, while offshore UK and Canadian retail sales and Japanese CPI data dominate the macro ticket.

Key Movers

The US dollar found support and retraced Wednesday’s downturn through trade on Thursday as equities traded higher and treasury yields cooled. Risk sentiment improved Thursday after US manufacturing and Services PMI reports both printed higher than anticipated, suggesting the economy is more resilient to the impacts of President Trump’s tariff agenda. Business sentiment improved in May following the de-escalation in US-China trade tensions. In contrast, euro area PMI’s pointed lower as activity slowed through May. Activity, particularly across service sectors, contracted suggesting ongoing uncertainty surrounding both euro area and US economic policy is weighing on sentiment. The soft print lifted calls for the ECB to lower rates again in June, forcing the euro back below 1.13 and toward intraday lows at 1.1258. In other news, the pound tracked sideways, matching US dollar gains, while the yen failed to keep pace with rising yields allowing the dollar a break back above 143 and 143.50.

Our attentions turn now to Japan inflation data and retail sales reports for the UK and Canada, while trade and tariffs remain ongoing drivers of risk sentiment.

Expected Ranges

  • NZD/USD: 0.5850 - 0.5950 ▼
  • NZD/EUR: 0.5200 - 0.5300 ▼
  • GBP/NZD: 2.2500 - 2.2800 ▲
  • NZD/AUD: 0.9150 - 0.9250 ▼
  • NZD/CAD: 0.8130 - 0.8280 ▼

Written by

Matt Richardson

OFXpert

As a Senior Corporate Client Manager, Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange. Matt has clients who he has been working with for over a decade, a testament to his knowledge and dedication in the field. Matt is also a regular contributor on Ausbiz, offering clear and precise updates on currency market trends, showcasing his ability to interpret complex financial data into actionable insights.