USD to NZD Rate After RBNZ Gov Orr Comments
The USD to NZD rate started to move again yesterday after comments from the RBNZ governor Orr, after this pair climbed 1.5 cents higher last week.
The NZD/USD pair experienced a temporary rebound above 0.59 following the Reserve Bank of New Zealand’s (RBNZ) decision to cut interest rates by 50 basis points. This recovery came after the pair had fallen nearly 6 cents over the past two months, driven by the persistent strength of the US dollar. Despite the initial rally, NZD/USD remains trapped in a broader bearish trend, as the rebound failed to gain traction.
NZD/USD Chart Daily – The Price Remains Below the 20 SMA
The pair encountered strong resistance at the 20-day simple moving average (SMA), a key technical level on the daily chart. The attempted upward momentum faltered just below this resistance point, which has consistently capped gains in recent weeks. Earlier in the week, NZD/USD breached the crucial support level at 0.5850, triggering a sharp selloff that tested and briefly dipped under the 0.58 level. However, sellers were unable to maintain control below this threshold, allowing the pair to stage a modest recovery back into its prior trading range.
The brief spike above 0.59 was largely attributed to profit-taking on the US dollar and month-end flows tied to the Thanksgiving period, providing temporary relief to the New Zealand dollar.
RBNZ’s Dovish Stance and Market Expectations
Accompanying the rate cut, RBNZ Governor Adrian Orr signaled the likelihood of further monetary easing in the near future. This dovish tone, combined with lackluster domestic economic data, continues to weigh heavily on the New Zealand dollar. Market sentiment reflects these developments, with expectations now pointing to a 68% probability of a 25 basis point rate cut in February 2025. By the end of next year, traders anticipate a cumulative easing of 90 basis points.
So, despite the temporary relief provided by technical corrections and external factors, the NZD/USD remains under bearish pressure. The pair’s inability to sustain a meaningful recovery underscores the challenges posed by the RBNZ’s dovish policy outlook and ongoing weak economic indicators. Without a significant shift in fundamentals, the pair is likely to face continued resistance, with further downside risks in the near term.
RBNZ Governor Adrian Orr Remarks
- Changes to capital rules will not increase competition among banks
NZD/USD Live Chart
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