NZD/USD dips to 0.5650 as US dollar gains ahead of key data
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Stronger US dollar weighs on Kiwi
The NZD/USD pair continued its decline for the third consecutive session, trading near 0.5650 during Thursday’s European session. The New Zealand Dollar remains under pressure as a robust US Dollar, bolstered by hawkish Federal Reserve (Fed) sentiment, keeps demand for the Kiwi subdued.
Hawkish Fed expectations add pressure
Market participants are pricing in the likelihood that the Fed will maintain its borrowing rates within the 4.25%-4.50% range over the next three policy meetings, according to the CME FedWatch Tool. This outlook, combined with US President Donald Trump’s policy considerations, including a 10% tariff on Chinese imports, has fueled concerns about inflationary pressures.
Trump’s proposed tariff rate is significantly lower than the previously threatened 60%, aligning with campaign promises, yet it continues to influence market sentiment. Traders are also eyeing upcoming US economic releases, including Initial Jobless Claims, forecasted to rise to 220,000 from the prior 217,000, and the S&P Global PMI and Michigan Consumer Sentiment Index for January.
Stimulus fails to support Kiwi
Despite fresh stimulus measures from New Zealand and China, the NZD has failed to gain traction. New Zealand’s Prime Minister Christopher Luxon announced initiatives to ease foreign investment regulations, aiming to attract overseas capital. Meanwhile, Chinese authorities introduced measures to stabilize financial markets, such as allowing pension funds to increase equity investments and launching a pilot program for insurers to purchase domestic equities, initially scaled at 100 billion Yuan.
These initiatives underscore efforts to bolster economic confidence in the region, yet the New Zealand Dollar remains subdued, reflecting broader concerns over global economic stability and a cautious market mood.
Technical outlook and key levels
From a technical perspective, NZD/USD faces immediate support near the 0.5620-0.5600 range. A decisive break below this zone could open the door to further losses, targeting 0.5550. On the upside, resistance is observed near 0.5700, followed by stronger barriers around 0.5750.
Outlook remains cautious
As markets anticipate US economic data and monitor the Fed’s next moves, the NZD/USD pair remains vulnerable to downside risks. Broader market sentiment, driven by geopolitical developments and economic releases, will play a critical role in determining the pair’s near-term trajectory. With the US Dollar continuing to dominate amid hawkish Fed expectations, the Kiwi is likely to face further headwinds in the sessions ahead.
The NZD/USD pair continued its decline for the third consecutive session, trading near 0.5650 during Thursday’s European session. The New Zealand Dollar remains under pressure as a robust US Dollar, bolstered by hawkish Federal Reserve (Fed) sentiment, keeps demand for the Kiwi subdued.
Hawkish Fed expectations add pressure
Market participants are pricing in the likelihood that the Fed will maintain its borrowing rates within the 4.25%-4.50% range over the next three policy meetings, according to the CME FedWatch Tool. This outlook, combined with US President Donald Trump’s policy considerations, including a 10% tariff on Chinese imports, has fueled concerns about inflationary pressures.
Trump’s proposed tariff rate is significantly lower than the previously threatened 60%, aligning with campaign promises, yet it continues to influence market sentiment. Traders are also eyeing upcoming US economic releases, including Initial Jobless Claims, forecasted to rise to 220,000 from the prior 217,000, and the S&P Global PMI and Michigan Consumer Sentiment Index for January.
Stimulus fails to support Kiwi
Despite fresh stimulus measures from New Zealand and China, the NZD has failed to gain traction. New Zealand’s Prime Minister Christopher Luxon announced initiatives to ease foreign investment regulations, aiming to attract overseas capital. Meanwhile, Chinese authorities introduced measures to stabilize financial markets, such as allowing pension funds to increase equity investments and launching a pilot program for insurers to purchase domestic equities, initially scaled at 100 billion Yuan.
These initiatives underscore efforts to bolster economic confidence in the region, yet the New Zealand Dollar remains subdued, reflecting broader concerns over global economic stability and a cautious market mood.
Technical outlook and key levels
From a technical perspective, NZD/USD faces immediate support near the 0.5620-0.5600 range. A decisive break below this zone could open the door to further losses, targeting 0.5550. On the upside, resistance is observed near 0.5700, followed by stronger barriers around 0.5750.
Outlook remains cautious
As markets anticipate US economic data and monitor the Fed’s next moves, the NZD/USD pair remains vulnerable to downside risks. Broader market sentiment, driven by geopolitical developments and economic releases, will play a critical role in determining the pair’s near-term trajectory. With the US Dollar continuing to dominate amid hawkish Fed expectations, the Kiwi is likely to face further headwinds in the sessions ahead.