- NZD/USD has jumped above 0.5800 firmly after positive commentary from NZ officials.
- Wednesday’s rate hike by the RBNZ has widened policy divergence with the Fed.
- The kiwi economy doesn’t see any recession to curtail price pressures.
- The DXY has refreshed its day’s low amid a risk-on profile.
The NZD/USD pair has crossed the day-old hurdle of 0.5805 firmly and is looking to establish above the same. At the time of writing, the kiwi pair is trading around 0.5810, 1.26% above Wednesday’s close, and is aiming to record more upside. Stable risk-on impulse has strengthened the commodity-linked currency while the US dollar index (DXY) is facing the heat.
The DXY has refreshed its day’s low at 110.78 and is expected to display sheer volatility expansion ahead. The current downside momentum has opened doors for testing Wednesday’s low around 110.00 as investors are shifting their focus towards the US Nonfarm Payrolls (NFP) data.
The consensus for the payroll data is indicating a decline to 250k vs. the prior release of 315k. Wednesday’s US Automatic Data Processing (ADP) Employment data shows that the economy has added 208k jobs in September. Therefore, cues are favoring a lower-than-expected release.
On the NZ front, the announcement of the fifth 50 basis points (bps) interest rate hike by the Reserve Bank of New Zealand (RBNZ) has widened the RBNZ-Federal Reserve (Fed) policy divergence. RBNZ’s Official Cash Rate (OCR) has been pushed to 3.5% and more hikes are also expected.
Meanwhile, the commentary from New Zealand (NZ) Deputy Prime Minister and Finance Minister Grant Robertson on monetary policy and exchange value has also strengthened the antipodean. The commentary states that the kiwi economy is not anticipating a recession situation to curtain inflationary pressures. They further added that higher interest rates would restrict demand and the inflation rate. And, the number one issue the businesses face is tight labor supply.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD extends recovery beyond 1.0400 amid Wall Street's turnaround
EUR/USD extends its recovery beyond 1.0400, helped by the better performance of Wall Street and softer-than-anticipated United States PCE inflation. Profit-taking ahead of the winter holidays also takes its toll.
GBP/USD nears 1.2600 on renewed USD weakness
GBP/USD extends its rebound from multi-month lows and approaches 1.2600. The US Dollar stays on the back foot after softer-than-expected PCE inflation data, helping the pair edge higher. Nevertheless, GBP/USD remains on track to end the week in negative territory.
Gold rises above $2,620 as US yields edge lower
Gold extends its daily rebound and trades above $2,620 on Friday. The benchmark 10-year US Treasury bond yield declines toward 4.5% following the PCE inflation data for November, helping XAU/USD stretch higher in the American session.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.