New Zealand dollar continues to trade below US$0.60
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Daily Currency Update
The New Zealand dollar is slightly weaker this morning when valued against the Greenback currently trading at 0.5944 at time of writing. The lack of progress toward defusing the US-China trade deal exerts some selling pressure on the China-proxy Kiwi. The rising bets that the Reserve Bank of New Zealand (RBNZ) will lower its Official Cash Rate (OCR) at the May meeting might contribute to the NZD’s downside. The markets fully expect the RBNZ to cut its 3.5% OCR by 25 basis points (bps) in May, with a further reduction to 2.75% by year-end. Inflation in New Zealand is expected to accelerate this year, driven by a weaker currency and rising oil prices, according to ANZ Bank New Zealand. These factors are projected to increase the cost of imported goods, prompting economists to adjust their outlook. ANZ forecasts headline inflation to climb to 2.7% in the second half of 2025, up from 2.2% in the final quarter of 2024. The bank’s latest estimate surpasses its previous prediction of a 2.3% peak for the year. The New Zealand dollar has declined 5.6% against the US dollar over the past three months, marking the worst performance among G-10 currencies. This depreciation, coupled with rising oil prices, is pressuring tradable inflation a category that includes imported goods. Recent data revealed that tradable prices rose 0.3% in the fourth quarter of 2024, the first increase in five quarters.Key Movers
The US dollar strengthens modestly on Friday as investors digest contradictory messaging from the United States and China regarding potential tariff negotiations. While President Donald Trump suggested dialogue is ongoing, Beijing explicitly denied any current talks. This divergence injected volatility into markets, though the Greenback maintained an edge, with the US dollar Index (DXY) up around 0.37% near the 99.65 zone at the time of writing. On the data front the cost of orders for durable goods received by factory owners rose at a robust pace of 9.2% in March, compared to estimates of 2% and the prior release of 0.9%. Business owners would look to pass on the impact of higher cost to consumers. Such a scenario will boost inflation and limit the Federal Reserve (Fed) to support monetary policy expansion. Gold price made a U-turn and erased Thursday’s gains, falling below the $3,300 mark as the Greenback remained bid and Bullion failed to capitalize on falling US Treasury yields. A de-escalation of the trade war between the US and China sponsored a leg-down in the precious metal, which exchanged hands at $3,294, losing over 1.60%. Next week, traders are eyeing the release of the US JOLTS report for March, the first reading of Q1 2025 Gross Domestic Product (GDP), the ISM Manufacturing PMI, and April’s Nonfarm Payrolls figures.Expected Ranges
- NZD/USD: 0.5850 - 0.6050 ▼
- NZD/EUR: 0.5150 - 0.5350 ▼
- GBP/NZD: 2.2200 - 2.2400 ▲
- NZD/AUD: 1.0600 - 1.0800 ▼
- NZD/CAD: 0.8150 - 0.8350 ▼