News
7x24
Quotes
Economic Calendar
Video
Data
- Names
- Latest
- Prev.
NZD Slides to Seven-Month Low as RBNZ-Fed Policy Divergence Widens Ahead of Rate Decision
Traders' Opinions
Summary:
The New Zealand Dollar is stuck near seven-month lows as expectations of an imminent RBNZ rate cut collide with diminishing hopes of near-term Fed easing, widening policy divergence and driving sustained USD strength.
Sell
TradingNZDUSD
EXP
0.56050
Entry Price
0.54800
TP
0.56600
SL
0.56007 -0.00094 -0.17%
0
Point
Flat
0.54800
TP
CLOSING
0.56050
Entry Price
0.56600
SL
The New Zealand Dollar remained pinned near seven-month lows on Friday, with NZD/USD struggling around 0.5580 as bulls repeatedly failed to reclaim the 0.5600 handle. The pair’s inability to generate meaningful upside reflects an increasingly stark monetary policy divergence: investors expect the Reserve Bank of New Zealand to deliver another rate cut next week, while diminishing prospects for a December Federal Reserve easing continue to support broad U.S. Dollar strength.
Markets have spent weeks recalibrating their expectations for global monetary policy, and for New Zealand, the shift has been particularly bearish. The local economy continues to lose momentum, inflation pressures are easing more quickly than expected, and leading indicators suggest further cooling is inevitable. Meanwhile, U.S. data has remained surprisingly resilient, providing the Fed with a stronger case to delay easing. Together, the two trajectories have positioned NZD/USD firmly on the defensive, with little sign of a near-term trend reversal.
Fresh U.S. employment data released Thursday reinforced the economy’s relative outperformance. The U.S. added 119,000 jobs in September—more than double the expected 50,000—in a signal that hiring, although slower than earlier in the year, is not collapsing as previously feared. The October reading, however, was revised significantly lower to a net loss of 4,000 jobs, compared with an initially reported 22,000 gain.
Even with the softer revision, the overall narrative remains one of stability rather than deterioration. Surprisingly, the U.S. unemployment rate ticked up to 4.4%, its highest level in four years, from 4.3% in August. Yet this rise did little to revive expectations of a December rate cut. Market probabilities for a Fed move have now slipped below 50%, compared with over 60% last week and nearly 100% just a month ago.
For currency markets, this shift is critical. As traders gradually unwind expectations of rapid Fed easing, the U.S. Dollar has found renewed strength—particularly against currencies like the NZD, where domestic conditions point in the opposite direction.
Recent New Zealand economic releases highlight a country struggling to regain traction after a prolonged slowdown. Producer price index figures showed factory-gate inflation moderating more sharply than anticipated, and the RBNZ’s own survey of inflation expectations for Q4 held steady within the central bank’s price-stability range.
Together, these metrics underscore the reduced inflation threat and strengthen the case for additional monetary easing. With growth subdued and inflation trending down, policymakers have few incentives to remain restrictive. Markets are now almost fully pricing in another rate cut next week—one that would drop the Official Cash Rate to 2.25%, its lowest level in three years and well below the 5.5% peak seen in August 2024.
That magnitude of easing relative to the Federal Reserve’s cautious stance is precisely the policy divergence fueling NZD/USD weakness.
Technical Analysis
From a technical perspective, NZD/USD remains firmly trapped within a bearish structure. The pair extended declines after breaking below the key support zone at 0.5610, a level that previously provided multiple reaction points. Price action continues to trade beneath the 50-day exponential moving average, reinforcing the dominant downward trend.
The structure on the shorter-term charts also reflects persistent negative bias, with the pair trading along a well-defined descending minor trendline. However, some early signs of downside exhaustion are emerging: relative strength indicators have slipped into oversold territory, suggesting that the pace of losses could slow in the near term.
Still, without a sustained break above 0.5650—or a notable shift in macro drivers—any recovery attempts may struggle to gain traction. For now, the path of least resistance remains to the downside, with potential for further declines toward 0.5530 or even 0.5480 if the RBNZ signals a more aggressive easing cycle.
TRADE RECOMMENDATION
SELL NZDUSD
ENTRY PRICE: 0.56050
STOP LOSS: 0.56600
TAKE PROFIT: 0.5480
Risk Warnings and Investment Disclaimers
You understand and acknowledge that there is a high degree of risk involved in trading with strategies. Following any strategies or investment methodologies is the potential for loss. The content on the site is being provided by our contributors and analysts for information purposes only. You alone are solely responsible for determining whether any trading assets, or securities, or strategy, or any other product is suitable for you based on your investment objectives and financial situation.
Quick Access to 7x24
Quick Access to More Editor-selected Real-time News
Exclusive video for free
FastBull project team is dedicated to create exclusive videos
Real-time Quotes
View more faster market quotes
More comprehensive macro data and economic indicators
Members have access to entire historical data, guests can only view the last 4 years
Member-only Database
Comprehensive forex, commodity, and equity market data
English
English
العربية
繁體中文
简体中文
Bahasa Melayu
Bahasa Indonesia
ภาษาไทย
Tiếng Việt
Copyright © 2025 FastBull Ltd
Home News Columns 7x24 Economic Calendar Quotes Video Data WarehouseAnalysis AI Signal Pro User Agreement Privacy Policy About Us
Risk Disclosure
The risk of loss in trading financial assets such as stocks, FX, commodities, futures, bonds, ETFs or crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.
No consideration to invest should be made without thoroughly conduct your own due diligence, or consult with your financial advisors. Our web content might not suit you, since we have not known your financial condition and investment needs. It is possible that our financial information might have latency or contains inaccuracy, so you should be fully responsible for any of your transactions and investment decisions. The company will not be responsible for your capital lost.
Without getting the permission from the website, you are not allow to copy the website graphics, texts, or trade marks. Intellectual property rights in the content or data incorporated into this website belongs to its providers and exchange merchants.