New Zealand Dollar consolidates around 0.5675 vs USD as bears await Trump-Xi summit

Source Fxstreet
  • NZD/USD struggles to register any meaningful recovery and hangs near early July lows.
  • Rising Fed rate hike bets and the US-Iran standoff underpin the USD, capping spot prices.
  • Traders also seem hesitant and opt to wait for the Trump-Xi meeting for a fresh impetus.

The NZD/USD pair flatlines around the 0.5675 region, trading just above its lowest level since early July, set the previous day, as investors await a meeting between US President Donald Trump and his Chinese counterpart Xi Jinping. The incoming headline will influence sentiment surrounding antipodean currencies, including the Kiwi, and provide some impetus.

In the meantime, the US Dollar (USD) pauses for a breather following the previous day's strong move up to a fresh high since July 29 and acts as a tailwind for the NZD/USD pair. However, rising US Federal Reserve (Fed) rate hike expectations, along with persistent geopolitical uncertainties, act as a tailwind for the buck. Apart from this, the Reserve Bank of New Zealand's (RBNZ) dovish outlook warrants some caution before positioning for any meaningful recovery for the currency pair.

Investors ramped up their bets and now see around a 70% chance that the US central bank will raise borrowing costs again in October after a private survey showed on Wednesday that US business activity accelerated for a fourth straight month. In fact, the S&P Global flash Composite PMI Output Index rose from 56.0 to 58.4 in September, the highest level since July 2021. Adding to this, the overnight rally in oil prices reignited inflation fears, underpinning prospects for further Fed tightening.

Meanwhile, tensions between the United States and Iran escalated once again after Trump issued a fresh warning to Iran during his United Nations General Assembly (UNGA) speech on Tuesday. Moreover, Iran's President Masoud Pezeshkian highlighted the still-wide gap between the two sides, but showed readiness for a diplomatic solution to end the conflict. Nevertheless, the geopolitical risk premium remains in play, which should benefit the safe-haven USD and cap the NZD/USD pair.

NZD/USD daily chart

Chart Analysis NZD/USD


Technical Analysis

The NZD/USD pair maintains a near-term bearish bias following the overnight breakdown below the 0.5700 mark and seems vulnerable to extend the downswing toward prior lows near 0.5625. On the top side, any attempted recovery might now confront immediate hurdle near the 0.5700 support breakpoint, above which a bout of a short-covering could lift spot prices to the 0.5765 horizontal zone.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

US Dollar Price This week

The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Australian Dollar.

USD EUR GBP JPY CAD AUD NZD CHF
USD 0.95% 1.16% 0.77% 0.84% 1.23% 0.84% 0.24%
EUR -0.95% 0.22% -0.16% -0.12% 0.28% -0.10% -0.70%
GBP -1.16% -0.22% -0.48% -0.34% 0.04% -0.33% -0.92%
JPY -0.77% 0.16% 0.48% 0.09% 0.44% 0.08% -0.51%
CAD -0.84% 0.12% 0.34% -0.09% 0.46% -0.01% -0.58%
AUD -1.23% -0.28% -0.04% -0.44% -0.46% -0.38% -1.04%
NZD -0.84% 0.10% 0.33% -0.08% 0.00% 0.38% -0.60%
CHF -0.24% 0.70% 0.92% 0.51% 0.58% 1.04% 0.60%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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