USD to NZD Steady Above 0.5850 Support, Ahead of the FOMC

The USD to NZD rate has stabilized this week after a 150 pip decline last week, as we wait for the FED meeting. NZD/USD pair has been on a downward trajectory since 2021, although it has mostly been trading within a range throughout 2024. Recently, the pair fell below the 0.60 level, and traders are now eyeing the lower end of this range near the 0.5850 mark. The weekly chart indicates a downward trend from previous highs, with the pair currently in a bearish phase, influenced by the weakening Chinese economy and dovish comments from the Reserve Bank of New Zealand (RBNZ).

The RBNZ’s recent decision to maintain a dovish stance on interest rates led to a 100-pip drop in the NZD/USD pair, marking the start of the current downward movement. This decline may continue as market participants turn their attention to the US Federal Reserve, which is expected to keep rates steady today but may signal a rate cut in September.

NZD/USD Chart Weekly – MAs Pushing the Highs Lower

The New Zealand Dollar (NZD) has been under increased selling pressure recently, influenced by a surprising interest rate cut from the People’s Bank of China (PBOC) and disappointing GDP figures from China. These factors are significant as China is a major trading partner for New Zealand. The situation has added to the negative sentiment surrounding the Kiwi, especially with rising expectations that the Reserve Bank of New Zealand (RBNZ) might lower interest rates early next week. This anticipation of a potential rate cut by the RBNZ is contributing to the continued weakness of the NZD.

New Zealand Building Consents for June

• New Zealand Building Consents for June: -13.8% month-on-month
• May Building Consents: -1.7%
• June Building Consents: -24% year-on-year

Stats NZ reported:

• “The number of homes consented in the year ended June 2024 has fallen to levels last seen five years ago.”
• “The decrease in the number of homes consented in June 2024 was partly due to the lower number of working days in the month.”

NZD/USD Live Chart