USD to NZD Rate Keeps Bouncing in A 50 Pip Range

Over the past two weeks, the USD to NZD exchange rate has been characterized by fluctuations within a narrow range, moving in a 50-pip range. Early in the month, the exchange rate began to rise again, with the price surpassing the 0.61 level. This uptrend was triggered by lower US CPI inflation data from the previous month, which likely weakened the US dollar.

NZD/USD Chart H4 – The 50 SMA Is Acting As Support

Despite the upward movement, the exchange rate remains volatile due to ongoing unpredictability in the market. Since the beginning of April, the NZD/USD exchange rate has shown a rising trend, indicating the relative strength of the New Zealand dollar compared to the US dollar.

This strength has been supported by softer US economic data, which has weighed on the value of the US dollar. Moving Averages: The price of NZD/USD crossed above the 50-day Simple Moving Average (SMA) earlier in May, indicating a potential shift in trend direction. The SMA, previously acting as a resistance level, now seems to be providing support for the pair.

US Durable Goods Orders for April

Summary:

• Headline Durable Goods Orders: Increased by 0.7% (vs. -0.8% expected, prior +0.9%)
• Excluding Transportation: Increased by 0.4% (vs. 0.1% expected, prior 0.0%)
• Excluding Defense: 0.0% MoM (prior 1.2%)
• Nondefense Capital Goods Excluding Aircraft: Increased by 0.3% (vs. 0.1% expected, prior -0.2%)
• Shipments: Increased by 1.2% MoM, 2.3% YoY

Detailed Analysis:

1. Headline Durable Goods Orders:
   • Current Month: 0.7% increase
   • Expectations: Significantly above the forecast of a -0.8% decline
   • Previous Month Revision: Adjusted to 0.8% from the preliminary 0.9%
2. Excluding Transportation:
   • Current Month: 0.4% increase, higher than the 0.1% expected
   • Previous Month: Flat at 0.0%
3. Excluding Defense:
   • Current Month: 0.0% month-over-month change, down from the prior month’s 1.2%
4. Nondefense Capital Goods Excluding Aircraft:
   • Current Month: 0.3% increase, better than the expected 0.1%
   • Previous Month: Revised to a -0.2% decline
5. Shipments:
   • Current Month: Increased by 1.2%
   • Year-over-Year: Up 2.3%

Annual Overview:

• Durable Goods Orders: Increased by 0.5% over the year
• Excluding Transportation: Up 2.1%
• Excluding Defense: Up 1.4%

Observations:

• Third Consecutive Monthly Increase: Durable goods orders have been rising for three straight months.
• Transportation Equipment: Led the increase with a 1.2% gain, also marking the third consecutive month of increases.
• Volatility: The durable goods number can be volatile; last month’s preliminary showed a 2.6% gain, which was later revised to 0.8%.

April’s durable goods orders report indicates a stronger-than-expected performance, particularly in core areas excluding transportation and defense, which suggests a healthy demand in various sectors and contributes positively to the outlook for US economic activity.

The consistent increases over the past three months highlight resilience in durable goods orders, supporting a positive economic outlook, however, the USD didn’t benefit from this, so NZD/USD ended up around 30 pips higher at the end of the day. But this report can be quite volatile. Last month the preliminary release showed 2.6% gain in durable goods, however it was revised lower to 0.8%.

NZD/USD Live Chart