Skip to content NZDUSD Weakens as Fed Rate Cut Hopes Diminish
The New Zealand dollar dropped to approximately $0.609 on Monday, influenced by a robust U.S. dollar and uncertainties about China’s financial support measures. Recent economic reports from the U.S. led traders to reduce their expectations for significant interest rate reductions by the Federal Reserve in the upcoming months.
China’s Vague Fiscal Stimulus Leaves Markets Cold
Over the weekend, China introduced additional fiscal stimulus measures. However, the absence of detailed information regarding the size of these measures left investors feeling underwhelmed.
Furthermore, the Reserve Bank in New Zealand cut interest rates by 0.50%, indicating that more drastic cuts could be on the horizon. This move puts additional strain on the Kiwi dollar.
New Zealand’s manufacturing sector showed a slight improvement in September, yet it has been shrinking for the 19th month. Contracting for the seventh month, the services sector also faces difficulties, highlighting persistent economic challenges.
NZDUSD Analysis – 14-October-2024
The NZD/USD primary trend is bearish, trading below the 50- and 100-period simple moving averages, with the immediate resistance at $0.610. From a technical perspective, the market is oversold, and we expect New Zealand’s dollar to erase some of its recent losses before the downtrend resumes.
Hence, if the NZD/USD price stabilizes above $0.610, the current uptick momentum can potentially target the 50-period simple moving average at approximately $615.
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