NZDUSD Fundamental Analysis – 27-June-2024

The New Zealand dollar stayed around $0.609 after dropping to a 1-1/2-month low earlier. This decline was due to the strong US dollar, boosted by hawkish comments from Federal Reserve officials.

Fed Governor Bowman stated on Wednesday that inflation would stay high for some time, so cutting interest rates is not suitable yet. Market players are looking forward to the US PCE price index release on Friday, which could clarify the Fed’s interest rate plans.

US GDP Data and Biden vs. Trump Debate

The US first-quarter GDP data and a critical debate between President Joe Biden and Republican rival Donald Trump on Thursday are also drawing attention.

In New Zealand, the Reserve Bank is expected to keep its policy steady until at least mid-2025, as inflation risks remain. However, investors expect a rate cut in November. The Kiwi has dropped nearly 1% this month.

NZDUSD Fundamental Analysis – 27-June-2024

The NZD/USD pair is currently under pressure, trading around $0.609, primarily due to a stronger US dollar bolstered by the Federal Reserve’s hawkish stance. Fed Governor Bowman’s recent statement about prolonged high inflation has reinforced expectations that US interest rates will remain high, reducing the appeal of the NZD.

Upcoming US economic data, including the PCE price index and first-quarter GDP, will be crucial in shaping market expectations about future Fed policies. Domestically, the Reserve Bank of New Zealand will likely keep its policy steady until mid-2025 due to persistent inflation risks.

However, investors anticipate a rate cut by November, reflecting concerns about the domestic economic outlook. This mixed sentiment contributes to the Kiwi’s nearly 1% decline this month.

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