New Zealand Dollar Faces Downward Pressure Ahead of Key Inflation Data and RBNZ Outlook
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Daily Currency Update
Last week, the New Zealand dollar (NZD) experienced a modest decline, slipping approximately 0.7–0.8% against the U.S. dollar, losing ground from around 0.601 USD to about 0.595. Much of the weakness was driven by a combination of global volatility—stemming from renewed U.S. tariff concerns—and a broadly firmer greenback. Despite a midweek bounce fueled by strong Chinese Q2 growth and dovish Fed signals, the kiwi remained under pressure, ending the week near the lower end of its 0.591–0.601 trading range. Elliott-wave technicals also hinted at near-term bearish momentum, with short-term indicators suggesting the 0.5925–0.5950 zone acting as a focal consolidation area.Looking ahead this week, the New Zealand dollar (NZD) is expected to remain subdued and reactive to domestic inflation data and global risk sentiment. Analysts are watching closely for the Q2 CPI release on Monday, with expectations around +0.6% QoQ—any deviation could influence RBNZ’s policy outlook and NZD/USD direction. Technical indicators show the pair hovering near its 200‑day EMA (~0.5910) and modestly bearish, with potential support hanging around 0.5880‑0.5900 and resistance at 0.6000. Meanwhile, global risk dynamics—especially U.S. Fed signals and Chinese data—remain key drivers; a risk-off shift could weigh on the Kiwi. Overall, market sentiment leans slightly bearish, with NZD/USD likely to trade in the 0.5900–0.6000 band, unless inflation surprises to the upside or risk appetite improves.
Key Movers
Last week, the U.S. dollar Index (DXY) gained ground, rising approximately 0.7%, with its value increasing from roughly 98.10 to 98.57 by Friday, July 18. The rise came amid stronger-than-expected U.S. economic data, including a rebound in June retail sales and a dip in unemployment claims, which reinforced expectations that the Federal Reserve will delay further rate cuts. Although the index briefly approached 99 midweek, it pulled back slightly to finish the week near 98.57, marking a second consecutive weekly gain. Technical levels played a role too: DXY broke above its 38.2% Fibonacci retracement at 98.20—a bullish signal—but remained capped around its 55-day moving average near 98.56.Looking ahead this week, the U.S. dollar is poised to remain firm as markets focus on further signs of economic resilience and the Federal Reserve’s policy trajectory. After its 0.7% gain last week and a strong recovery in July thanks to robust labor and inflation data, traders are tapering expectations for imminent rate cuts. Key upcoming events include U.S. retail sales, jobless claims, and Fed commentary, which could all reinforce the dollar’s upward momentum. Overall, unless fresh data or geopolitical shocks intervene, the dollar is likely to hold steady or strengthen slightly through this week.
Expected Ranges
- NZD/USD: 0.5850 - 0.6050 ▼
- NZD/EUR: 0.5000 - 0.5200 ▼
- GBP/NZD: 2.2400 - 2.2600 ▲
- NZD/AUD: 1.0800 - 1.1000 ▼
- NZD/CAD: 0.8100 - 0.8300 ▲