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NZD: NZD/USD Edges Lower As Banks See 50bps Cuts Next Week

NZD
USGlobalAPACNew ZealandBulletMarketsForeign Exchange BulletsRegionNorth America
  • NZD/USD fell 0.29% to 0.6263 on Wednesday as investors shifted toward the USD amid rising tensions in the Middle East. Additionally, the NZD weakened following local banks' expectations that the RBNZ will cut rates by 50 basis points at next week’s meeting. However, additions rate cuts from major central banks like the Fed and ECB may limit the NZD’s downside, and Chinese stimulus could support demand for New Zealand exports.
  • New Zealand's property market downturn continued in September, with prices falling 0.5%, marking the seventh consecutive decline. However, signs of improving sentiment from falling mortgage rates suggest the downturn may end soon, though any sharp price rebound is unlikely due to weak economic conditions and labor market challenges, per CoreLogic.
  • The pair closed at session lows on Wednesday, with initial support is 0.6250 (20-day EMA) below here 0.6200 is the next support zone. To the upside and break back above yesterday's highs of 0.6315 is needed to retest 0.6379 (Sep 30 highs). The RSI has dropped to 53, while the MACD indicator is trading near neutral.
  • RBNZ dated OIS pricing has continued to firm with 44bps or a 76% chance of a cut next week while the market is now pricing in 94bps of cuts now by November, looking further out the curve pricing is 2-6bps softer out to August 2025, with 225bps of cuts priced.
  • The NZ-US 2yr was little changed on Tuesday at 5bps
  • Expiries: 0.6310 ($1.06b) for NY Cut
  • Today we have ANZ Commodity prices at 1000 AEST
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  • NZD/USD fell 0.29% to 0.6263 on Wednesday as investors shifted toward the USD amid rising tensions in the Middle East. Additionally, the NZD weakened following local banks' expectations that the RBNZ will cut rates by 50 basis points at next week’s meeting. However, additions rate cuts from major central banks like the Fed and ECB may limit the NZD’s downside, and Chinese stimulus could support demand for New Zealand exports.
  • New Zealand's property market downturn continued in September, with prices falling 0.5%, marking the seventh consecutive decline. However, signs of improving sentiment from falling mortgage rates suggest the downturn may end soon, though any sharp price rebound is unlikely due to weak economic conditions and labor market challenges, per CoreLogic.
  • The pair closed at session lows on Wednesday, with initial support is 0.6250 (20-day EMA) below here 0.6200 is the next support zone. To the upside and break back above yesterday's highs of 0.6315 is needed to retest 0.6379 (Sep 30 highs). The RSI has dropped to 53, while the MACD indicator is trading near neutral.
  • RBNZ dated OIS pricing has continued to firm with 44bps or a 76% chance of a cut next week while the market is now pricing in 94bps of cuts now by November, looking further out the curve pricing is 2-6bps softer out to August 2025, with 225bps of cuts priced.
  • The NZ-US 2yr was little changed on Tuesday at 5bps
  • Expiries: 0.6310 ($1.06b) for NY Cut
  • Today we have ANZ Commodity prices at 1000 AEST