Key Moments
- NZD/USD trades near 0.5820 and is down 0.58% on the day, marking a fourth straight daily decline.
- Rising Oil prices tied to the Middle East conflict support the US Dollar and revive global inflation concerns.
- Traders focus on incoming US data, including PCE, GDP, Durable Goods Orders, and consumer sentiment, for policy clues.
NZD Under Pressure as Safe-Haven Demand Lifts USD
NZD/USD extends its losing streak on Friday, trading around 0.5820 at the time of writing and declining 0.58% on the day. The pair posts a fourth consecutive daily drop as the US Dollar (USD) strengthens amid heightened geopolitical risks and revived inflation fears.
The US Dollar remains underpinned as market participants reassess the outlook for US monetary policy. The US Dollar Index (DXY), which measures the greenback against a basket of six major currencies, moves above 100, approaching its strongest level since November. Rising US Treasury yields are adding to the Dollar’s appeal.
Oil Spike and Policy Expectations Support the Greenback
A sharp rise in Oil prices is amplifying concerns that inflationary pressures could prove more persistent. Market expectations now lean toward the Federal Reserve (Fed) delaying the start of its easing cycle, with anticipated rate cuts pared back in recent days. This backdrop continues to favor the US Dollar and weigh on risk-sensitive currencies, including the New Zealand Dollar (NZD).
Iran’s new Supreme Leader, Mojtaba Khamenei, indicated that closing the Strait of Hormuz could remain part of the country’s strategy to pressure its adversaries, intensifying uncertainty in energy markets. While the International Energy Agency (IEA) has announced the release of 400 million barrels from strategic reserves in an effort to stabilize supply, Oil prices remain highly volatile.
Risk-Off Mood Hits the Kiwi
In this risk-averse environment, the Kiwi remains under sustained selling pressure. Investors are adopting a more cautious approach as geopolitical tensions escalate and global inflation risks rise, weighing on cyclical and risk-linked currencies.
Markets Look to US Data for Next Catalyst
Attention now turns to a busy US data docket scheduled for Friday, including the Personal Consumption Expenditures (PCE) Price Index, Gross Domestic Product (GDP), Durable Goods Orders, and the University of Michigan Consumer Sentiment Index. These releases could shape expectations for the future path of US monetary policy and drive short-term moves in NZD/USD.
According to analysts at BBH, the US Dollar’s strength is largely being driven by risks to shipping through the Strait of Hormuz and the sharp rebound in Oil prices. They note that as long as the Strait remains effectively disrupted, demand for US Dollar funding could keep the Greenback close to its cyclical highs.
New Zealand Dollar Performance Against Majors
The table below summarizes the New Zealand Dollar’s (NZD) percentage change against major currencies today. The New Zealand Dollar was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.44% | 0.58% | 0.06% | 0.21% | 0.49% | 0.56% | 0.23% | |
| EUR | -0.44% | 0.13% | -0.37% | -0.23% | 0.05% | 0.11% | -0.22% | |
| GBP | -0.58% | -0.13% | -0.51% | -0.36% | -0.08% | -0.03% | -0.35% | |
| JPY | -0.06% | 0.37% | 0.51% | 0.16% | 0.43% | 0.48% | 0.17% | |
| CAD | -0.21% | 0.23% | 0.36% | -0.16% | 0.27% | 0.32% | 0.02% | |
| AUD | -0.49% | -0.05% | 0.08% | -0.43% | -0.27% | 0.05% | -0.26% | |
| NZD | -0.56% | -0.11% | 0.03% | -0.48% | -0.32% | -0.05% | -0.32% | |
| CHF | -0.23% | 0.22% | 0.35% | -0.17% | -0.02% | 0.26% | 0.32% |
The heat map shows the percentage changes of major currencies against each other. The base currency is taken from the left column, while the quote currency is taken from the top row. For example, selecting the New Zealand Dollar from the left column and moving along the row to the US Dollar, the percentage change shown in the cell represents NZD (base)/USD (quote).
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