The NZD/USD pair struggles to capitalize on the previous day’s move higher and attracts some sellers during the Asian session on Wednesday in reaction to mixed employment details from New Zealand. Furthermore, the cautious market mood offers some support to the safe-haven US Dollar (USD) and turns out to be another factor undermining the risk-sensitive Kiwi.
The downside for the New Zealand Dollar (NZD), however, seems limited on the back of the Reserve Bank of New Zealand’s (RBNZ) more hawkish outlook on the future policy path. This marks a significant divergence in comparison to bets that the US Federal Reserve (Fed) will cut rates two more times in 2026, which keeps the USD on the defensive and should act as a tailwind for the NZD/USD pair.
Spot prices currently trade around the 0.6040-0.6035 region, down nearly 0.30% for the day. That said, the recent breakout above a technically significant 200-day Simple Moving Average (SMA) and this week’s resilience below the 0.6000 mark warrant some caution for the NZD/USD bears. Moreover, the SMA’s gradual upturn supports the broader uptrend, and staying above this gauge keeps the topside favored.
The Moving Average Convergence Divergence (MACD) remains in positive territory with the MACD line above the Signal line, while a contracting positive histogram hints at moderating upside momentum. The Relative Strength Index stands at 68 (bullish), just below overbought. A renewed expansion in MACD would open the door to further gains, with dips expected to draw buyers ahead of the rising 200-day SMA.
(The technical analysis of this story was written with the help of an AI tool.)
NZD/USD daily chart
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
Source: https://www.fxstreet.com/news/nzd-usd-price-forecast-sticks-to-mixed-jobs-data-led-losses-below-mid-06000s-202602040249
