NZD/USD Back Below 0.5900, ANZ Sees First Cut May 2025

The Kiwi traded lower against G10 currencies on Thursday with the exception of the GBP, finishing the Friday session down 0.25% vs the USD to 0.5888, while the BBDXY closed a touch higher, up 0.07% at 1,264.37.

• The NZD/USD reached a intraday low of 0.5852 as news broke of explosions in Iran. The currency at one point during that down recovered all losses, before finishing the session down 0.25% at 0.5888. The pair remains in a downtrend as it continues to trade well below the 20, 50, 100 & 200-day EMA and the 14-day RSI trades near lows at 35.
• Key levels to watch: Initial support is 0.5863 (Nov 11 lows) a break here could signal a move to test the yearly lows at 0.5774 (Oct 26 lows) while a break back above 0.5900 is needed to retest 0.5950 (Apr 15 highs).
• ANZ predicts that New Zealand's central bank will delay easing monetary policy until next year, awaiting concrete evidence of inflation containment. Despite a projected drop in headline inflation to 2.6% in the third quarter of this year, non-tradables inflation is expected to remain high at 4.5%, keeping rate cuts at bay. The bank forecasts the Official Cash Rate to remain at 5.5% until May 2025, anticipating headline inflation of 2.1% and non-tradables inflation of 3.7% in the first quarter of 2025.
• The US-NZ 2y is up 5bp to -11.5bps
• Option expiries: 0.5350 (NZD552m), 0.5700 (NZD300m) for Apr 22 NY Cut, while notable upcoming strikes are 0.6100 (NZD331.2m April 23)
• Looking ahead: Next data released will be Trade Balance on Tuesday,