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NZD: NZD/USD Remains Under Pressure, Holds Below 0.5600

NZD
USNew ZealandNorth AmericaBulletAPACForeign Exchange BulletsMarkets
  • The NZD/USD remains under pressure near a two-year low, we last trade at 0.5599 after hitting 0.5570 on Thursday, as the USD strengthens on expectations of a gradual Fed rate-cut cycle. The Kiwi faces additional downside due to weak Chinese inflation data, which signals a poor economic outlook for New Zealand. With an empty local calendar, investors await US Nonfarm Payrolls data, expected to show slowing job growth, which may influence Fed rate expectations.
  • Technical indicators suggest bearish momentum, with the pair at risk of testing the 13-year low of 0.5470 if it breaks below 0.5500. To the upside a break above 0.5660 (20-day EMA) before any sort of momentum change can occur.
  • The NZ-US 2yr swap remains trading near its lowest levels since 2018 at -83bps
  • RBNZ dated OIS is pricing in 50bps of cuts at the Feb meeting, and a further 25bps of cuts in April, while there is 125bps of cumulative cuts priced in by Nov 2025
  • Upcoming notable strikes: 0.5875 (NZD606m Jan. 15), 0.6075 (NZD425.8m Jan. 15)
  • The local calendar is empty today, on Monday we have Building Permits & Filled Jobs
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  • The NZD/USD remains under pressure near a two-year low, we last trade at 0.5599 after hitting 0.5570 on Thursday, as the USD strengthens on expectations of a gradual Fed rate-cut cycle. The Kiwi faces additional downside due to weak Chinese inflation data, which signals a poor economic outlook for New Zealand. With an empty local calendar, investors await US Nonfarm Payrolls data, expected to show slowing job growth, which may influence Fed rate expectations.
  • Technical indicators suggest bearish momentum, with the pair at risk of testing the 13-year low of 0.5470 if it breaks below 0.5500. To the upside a break above 0.5660 (20-day EMA) before any sort of momentum change can occur.
  • The NZ-US 2yr swap remains trading near its lowest levels since 2018 at -83bps
  • RBNZ dated OIS is pricing in 50bps of cuts at the Feb meeting, and a further 25bps of cuts in April, while there is 125bps of cumulative cuts priced in by Nov 2025
  • Upcoming notable strikes: 0.5875 (NZD606m Jan. 15), 0.6075 (NZD425.8m Jan. 15)
  • The local calendar is empty today, on Monday we have Building Permits & Filled Jobs