Key Points
- NZD/USD fell 0.50% to $0.5628, hovering near seven-month lows.
- Markets fully price a 25bps cut at the upcoming RBNZ meeting, potentially the last in this cycle.
The New Zealand dollar weakened to around $0.563 on Wednesday, extending its decline amid growing confidence that the Reserve Bank of New Zealand (RBNZ) will deliver another 25 basis point rate cut next week.
Markets have now fully priced in the move, as recent economic data pointed to sluggish domestic momentum and easing inflationary pressures.
Today’s release showed producer prices rose less than expected in the third quarter, reinforcing expectations that policymakers will maintain an accommodative stance to support growth.
However, analysts suggest that the upcoming cut could mark the end of the easing cycle, with further moves unlikely unless global conditions worsen sharply.
External Factors Offer Limited Support
The external backdrop remains mixed. While U.S. President Donald Trump’s decision to lift tariffs on more than 200 food products last week could benefit New Zealand’s export sector, the move has not provided meaningful near-term support to the Kiwi.
Global risk sentiment remains subdued, and the U.S. dollar has held firm ahead of key U.S. economic data, keeping the NZD/USD pair under pressure.
Technical Analysis
NZD/USD trades around 0.5628, down 0.50%, with momentum remaining bearish on the daily chart. Prices hover near recent lows around 0.5606, where the pair found temporary support earlier in the week.
The short-term moving averages (5, 10, 30) remain aligned in a downtrend, while the MACD indicator continues to show negative momentum below the zero line. Immediate resistance is at 0.5670, followed by 0.5710, while key support sits at 0.5600 and 0.5560.
Cautious Forecast
The Kiwi dollar is likely to remain weak ahead of the RBNZ meeting, with traders expecting a dovish tone in the policy statement. A confirmed rate cut could push NZD/USD below 0.5600, while any hint that easing is ending might trigger a short-term rebound toward 0.5700.
In the broader context, subdued global growth and soft commodity demand are likely to limit the currency’s upside into year-end.
