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NZD: NZD/USD Find Some Support Following Bessent Nom, RBNZ Tomorrow

NZD
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  • The NZD/USD closed 0.24% higher at 0.5847, all the gains were made right on the open following news of Scott Bessent being nominated for Treasury Secretary. The NZD/USD rebounded from a fresh yearly low of 0.5817, with the RSI moving away from oversold territory, suggesting bearish momentum may be easing. However, the pair faces downside risks ahead of the RBNZ rate decision tomorrow, where a 50bps rate cut to 4.25% is expected.
  • The OIS market is pricing in 56.6bps of cuts or roughly a 26% chance of a 75bps, although just a single analyst expects there to be 75bps of cuts. Looking further out the OIS curve, the market is pricing 98.1bps of cuts by Feb and 155bps of cuts by October 2025, it was pricing in roughly 120bps of cuts early last week. So any hint on slowly the easing cycle should see strong support for the currency at tomorrow's meeting.
  • Taking a look at technical levels, support is now the 2023 lows of 0.5772 (Oct 26th 2023), with a break there then opening a potential move to the 2022 lows at 0.5500. Initial resistance is 0.5920/0.5925 (Nov 20 highs/20-day EMA), above here 0.6006 (50-day EMA).
  • The US-NZ 2yr swap closed little changed on Monday at -57bps, however it did make new multi-year lows of -63bps throughout the session, levels not seen since late 2019.
  • The local calendar is empty for the rest of the day, focus is largely on the RBNZ on Wednesday
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  • The NZD/USD closed 0.24% higher at 0.5847, all the gains were made right on the open following news of Scott Bessent being nominated for Treasury Secretary. The NZD/USD rebounded from a fresh yearly low of 0.5817, with the RSI moving away from oversold territory, suggesting bearish momentum may be easing. However, the pair faces downside risks ahead of the RBNZ rate decision tomorrow, where a 50bps rate cut to 4.25% is expected.
  • The OIS market is pricing in 56.6bps of cuts or roughly a 26% chance of a 75bps, although just a single analyst expects there to be 75bps of cuts. Looking further out the OIS curve, the market is pricing 98.1bps of cuts by Feb and 155bps of cuts by October 2025, it was pricing in roughly 120bps of cuts early last week. So any hint on slowly the easing cycle should see strong support for the currency at tomorrow's meeting.
  • Taking a look at technical levels, support is now the 2023 lows of 0.5772 (Oct 26th 2023), with a break there then opening a potential move to the 2022 lows at 0.5500. Initial resistance is 0.5920/0.5925 (Nov 20 highs/20-day EMA), above here 0.6006 (50-day EMA).
  • The US-NZ 2yr swap closed little changed on Monday at -57bps, however it did make new multi-year lows of -63bps throughout the session, levels not seen since late 2019.
  • The local calendar is empty for the rest of the day, focus is largely on the RBNZ on Wednesday