Skip to content Kiwi Faces Pressure – Fed and RBNZ Rate Cuts Loom
On Thursday, the New Zealand dollar remained near $0.602, approaching its lowest value in over two months. This movement is due to the strengthening of the US dollar, fueled by increasing expectations that the Federal Reserve will implement small interest rate cuts in the coming months.
NZ Dollar Falls as Trump Eyes 2024 Win
Additionally, the possibility that Donald Trump might win the 2024 presidential election also plays a role. The local currency is under additional pressure within New Zealand as the Reserve Bank of New Zealand is anticipated to reduce its rates by another 50 basis points during its last meeting in November.
There’s also a chance for a larger cut of 75 basis points. If realized, this would be the third time the Central Bank of New Zealand has lowered interest rates this year, following a 25-basis point cut in August and a 50-basis point cut in October.
NZDUSD Analysis – 24-October-2024
The NZD/USD currency pair bounced from $0.599, testing the median line of the Bollinger Bands indicator. MACD signals divergence and is about to signal a crossover. Notably, the primary trend is bearish because NZD/USD is below the Ichimoku Cloud indicator.
From a technical perspective, the market expects the current uptick momentum to extend to the Fair Value Gap area of around $0.608, backed by the Ichimoku Cloud. If this scenario plays out, the $0.608 could provide a decent entry point into the bear market.
Please note that the uptrend should be invalidated if the NZD/USD price exceeds the Ichimoku Cloud or the $0.608 resistance.
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