In case you missed the earlier headlines, you can check out the previous session wrap by Eamonn here:
That is putting a major drag on the kiwi after the RBNZ hinted at the end of its tightening cycle, reaffirming that rates have reached restrictive territory and will stay there.
NZD/USD is down over 1% on the day near the lows around 0.6170 as price looks poised for a test of its 200-day moving average next:
NZD/USD daily chart
The pair had been largely consolidating around 0.6100 to 0.6400 since the drop in February with price action trading in and around both the 100 (red line) and 200-day (blue line) moving averages.
The latter looks to be coming back into play now, seen at 0.6153 currently. A break below that will see sellers establish a more bearish bias although there is still key support seen at around 0.6100-11 for the time being.
In any case, what doesn’t bode well for the kiwi outlook is that there is no longer any sense of divergence in play between the RBNZ and Fed at the moment. Both central banks appear to be headed to the sidelines and so, general dollar and risk sentiment will be key drivers of NZD/USD moving forward instead.
Looking elsewhere, other major currencies aren’t doing a whole lot as we move towards European morning trade with light changes being observed. EUR/USD is sitting in a 12 pips range and that sort of exemplifies the lack of appetite to start the new day outside of the New Zealand dollar that is.
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- Source: https://www.forexlive.com/news/kiwi-the-laggard-as-rbnz-hints-at-end-to-rate-hikes-20230524/
