NZD/USD Pressured by Dovish RBNZ and Strong USD
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The NZD/USD pair is trading lower near 0.5830 on Friday, marking its third consecutive day of declines. The main factor driving the downside is dovish expectations surrounding the Reserve Bank of New Zealand (RBNZ) monetary policy meeting next week. Market participants widely anticipate a 50-basis-point rate cut to 4.25%, matching the reduction made in October. There is also a 25% chance of an even more aggressive 75-basis-point cut, reflecting a weak economic outlook. Comments from Treasury Chief Economic Adviser Dominick Stephens highlighted a prolonged slowdown in productivity, signaling downward revisions to economic and fiscal forecasts, adding further pressure to the Kiwi.
US Dollar Strength Exacerbates NZD Weakness
The Kiwi’s losses are amplified by the continued strength of the US dollar (USD), bolstered by robust economic data and speculation about a slower pace of Federal Reserve rate cuts. The US Dollar Index (DXY) hit a fresh yearly high of 107.20 during the European session, supported by better-than-expected initial jobless claims data. Claims dropped to 213k for the week ending November 15, below the forecast of 220k and the previous figure of 219k.
Upcoming Events to Watch
Market focus will shift to the US S&P Global PMI data, due for release during the North American session. The Manufacturing PMI is forecast to rise to 48.8 from 48.5, signaling a slower contraction, while the Services PMI is expected to increase to 55.3 from 55.0, indicating continued expansion in the services sector.
Technical Analysis: NZD/USD
Immediate support for NZD/USD is near the 0.5800 psychological level, with additional support at the year-to-date low of 0.5785. A break below this zone could open the door to further losses toward 0.5720, a key multi-year support level. On the upside, initial resistance is at 0.5880, with stronger barriers at 0.5915 (50-day EMA) and the psychological level of 0.6000.
Outlook The NZD/USD pair remains under bearish pressure, with dovish RBNZ expectations and USD strength setting the tone. The next direction will depend on the outcome of next week's RBNZ meeting and the impact of US PMI data on Federal Reserve rate-cut expectations.
US Dollar Strength Exacerbates NZD Weakness
The Kiwi’s losses are amplified by the continued strength of the US dollar (USD), bolstered by robust economic data and speculation about a slower pace of Federal Reserve rate cuts. The US Dollar Index (DXY) hit a fresh yearly high of 107.20 during the European session, supported by better-than-expected initial jobless claims data. Claims dropped to 213k for the week ending November 15, below the forecast of 220k and the previous figure of 219k.
Upcoming Events to Watch
Market focus will shift to the US S&P Global PMI data, due for release during the North American session. The Manufacturing PMI is forecast to rise to 48.8 from 48.5, signaling a slower contraction, while the Services PMI is expected to increase to 55.3 from 55.0, indicating continued expansion in the services sector.
Technical Analysis: NZD/USD
Immediate support for NZD/USD is near the 0.5800 psychological level, with additional support at the year-to-date low of 0.5785. A break below this zone could open the door to further losses toward 0.5720, a key multi-year support level. On the upside, initial resistance is at 0.5880, with stronger barriers at 0.5915 (50-day EMA) and the psychological level of 0.6000.
Outlook The NZD/USD pair remains under bearish pressure, with dovish RBNZ expectations and USD strength setting the tone. The next direction will depend on the outcome of next week's RBNZ meeting and the impact of US PMI data on Federal Reserve rate-cut expectations.