NZD/USD holds gains near one-month highs on weaker USD and remains below the 200-day SMA
- NZD/USD hits a multi-week high but struggles to break the 200-day SMA.
- Bets on a Fed rate cut continue to weaken the USD and continue to support the positive development.
- The RBNZ’s dovish stance is dampening further gains amid concerns about a slowdown in China.
The NZD/USD pair is attracting some follow-on buying for the second day in a row on Monday, rising to over a month highs amid sustained selling in the US dollar (USD). However, spot prices are struggling to overcome the very important 200-day Simple Moving Average (SMA) resistance and are trading around the 0.6070 area during the first half of the European session, still up over 0.35% for the day.
The US Producer Price Index (PPI) and Consumer Price Index (CPI) released last week pointed to a downward trend in inflation, confirming market speculation that the Federal Reserve (Fed) will begin its rate-cutting cycle in September. This, in turn, is triggering a fresh decline in US Treasury yields and pushing the USD Index (DXY), which tracks the greenback against a basket of currencies, to its lowest level since January. Apart from that, a stable performance in global equity markets is proving to be another factor undermining the safe-haven dollar and benefiting the risk-on kiwi.
However, the dovish stance of the Reserve Bank of New Zealand (RBNZ) last week is preventing bulls from making aggressive bets and limiting further gains. In fact, the central bank unexpectedly decided to cut the official policy rate (OCR) for the first time since March 2020, citing recent progress in meeting its annual inflation target and weak domestic economic growth. The RBNZ also announced further cuts in the coming months, which, together with concerns about an economic slowdown in China, is acting as a headwind for other countries’ currencies, including the New Zealand dollar (NZD).
Investors also seem cautious, preferring to wait for further cues on the Fed’s policy stance before positioning for the next leg of a directional move. Therefore, the focus remains on the release of the FOMC meeting minutes on Wednesday and Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium on Friday. Apart from that, New Zealand’s quarterly retail sales data due on Friday will help determine the short-term trajectory of the NZD/USD pair. In the meantime, USD price dynamics may continue to influence spot prices in the absence of relevant macro data on Monday.
US dollar price today
The table below shows the percentage change in the US dollar (USD) against the major listed currencies today. The US dollar was strongest against the Canadian dollar.
| USD | EUR | GBP | EUR | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.13% | -0.22% | -1.11% | -0.06% | -0.30% | -0.40% | -0.10% | |
| EUR | 0.13% | -0.16% | -0.94% | 0.07% | -0.26% | -0.43% | 0.00% | |
| GBP | 0.22% | 0.16% | -0.93% | 0.19% | -0.10% | -0.21% | 0.16% | |
| EUR | 1.11% | 0.94% | 0.93% | 0.98% | 0.77% | 0.83% | 0.87% | |
| CAD | 0.06% | -0.07% | -0.19% | -0.98% | -0.26% | -0.26% | -0.07% | |
| AUD | 0.30% | 0.26% | 0.10% | -0.77% | 0.26% | -0.02% | 0.26% | |
| NZD | 0.40% | 0.43% | 0.21% | -0.83% | 0.26% | 0.02% | 0.32% | |
| CHF | 0.10% | -0.01% | -0.16% | -0.87% | 0.07% | -0.26% | -0.32% |
The heatmap shows the percentage changes of the major currencies relative to each other. The base currency is selected from the left column, while the quote currency is selected from the top row. For example, if you select the US dollar from the left column and move along the horizontal line to the Japanese yen, the percentage change shown in the box corresponds to USD (base)/JPY (quote).
