empty
24.04.2025 12:59 AM
The Kiwi Has a Decent Chance to Continue Rising

Inflation in New Zealand in Q1 came in slightly above expectations, rising from 2.2% to 2.5% year-over-year. This was mainly due to the goods sector, while core inflation is slowing in line with forecasts. Meanwhile, the factors driving the overall disinflationary process remain stable.

This image is no longer relevant

Economic indicators are not particularly encouraging either. Activity in the services sector remains below the expansion threshold, and optimism in the manufacturing sector has weakened. Spending on durable goods has declined for the third consecutive month, and consumer activity remains subdued, contributing to further inflation slowdown.

The combination of decelerating inflation, weak economic growth, and external uncertainty suggests that the Reserve Bank of New Zealand may lean toward cutting interest rates more quickly than expected. Notably, ANZ Bank now forecasts two additional rate cuts compared to earlier projections, with a minimum rate expectation of 2.5% instead of 3.0%. This is a more dovish outlook than before, and if ANZ is correct, the Kiwi is unlikely to develop sustained growth against the U.S. dollar and may complete its correction at some level before turning downward again.

That is unless the U.S. falls into a deep recession and the dollar loses some of its advantages as the world's primary reserve currency. So far, the Trump administration's actions lead in that direction—though the intended outcome was likely quite different.

The net short position on the NZD has decreased again, this time by $215 million to -$1.95 billion. Speculative positioning remains bearish, but the fair value remains above the long-term average with no signs of a reversal.

This image is no longer relevant

Fair value showed a trend shift in mid-January and continues to confirm it. The sharp drop on April 4 had no fundamental basis and was a reaction to a political event. Fundamentally, the Kiwi remains a favorite in the NZD/USD pair.

NZD/USD has reached strong resistance at 0.6030. From here, there may either be an attempt to move higher on the current momentum or a brief consolidation and correction followed by another upward push. The likelihood of a decline is considered low. A break and hold above 0.6030 seems more realistic, but for sustained growth to continue, there is still little foundation, especially given the high level of uncertainty and the commodity-linked nature of the New Zealand dollar.

Kuvat Raharjo,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

GBP/USD Overview – June 12: Protests Against Trump and Fed Policy

The GBP/USD currency pair continued to trade very calmly on Wednesday. Naturally, when U.S. inflation data was released, we saw a brief burst of market reaction—though it didn't last long

Paolo Greco 04:07 2025-06-12 UTC+2

EUR/USD Overview – June 12: Is There Light at the End of the Tunnel?

The EUR/USD currency pair continued to trade very calmly throughout Wednesday. The market showed no reaction whatsoever to the seemingly positive news regarding U.S.-China trade negotiations. Why? Because that positivity

Paolo Greco 04:07 2025-06-12 UTC+2

Donald Trump Plans to Suppress the Uprising

For several consecutive days, protests and unrest have continued in some major U.S. cities, sparked by Donald Trump's new immigration policy. This time, the U.S. President has decided to deport

Chin Zhao 00:35 2025-06-12 UTC+2

EUR/USD. In the Shadow of the Trade Deal: U.S. Inflation Report Pressures the Greenback

A mixed U.S. inflation report pressured the greenback. The dollar index returned to 98.00, while the EUR/USD pair refreshed its weekly high, rising to 1.1491. Additional pressure on the U.S

Irina Manzenko 00:35 2025-06-12 UTC+2

Will the Dollar Maintain the Status Quo?

To make accurate predictions about the future, one must examine the past. The more than 10% rally in EUR/USD since the beginning of the year has been driven by four

Marek Petkovich 00:35 2025-06-12 UTC+2

XAU/USD. Analysis and Forecast

Currently, the price of gold remains confined within a weekly range. The key factors supporting price growth include a decision by the U.S. federal appellate court to uphold President Donald

Irina Yanina 18:35 2025-06-11 UTC+2

USD/JPY. Analysis and Forecast

At this stage, the Japanese yen continues to trade within an intraday consolidation range, approaching the two-week low against the U.S. dollar reached yesterday. The main factors influencing the movement

Irina Yanina 18:33 2025-06-11 UTC+2

EUR/GBP. Analysis and Forecast

However, at this point, it lacks follow-through buying, despite a fundamental backdrop that suggests the path of least resistance for spot prices lies to the upside. The weak performance

Irina Yanina 11:38 2025-06-11 UTC+2

Results of the Second Round of U.S.–China Negotiations

The United States and China have concluded two days of important trade negotiations with a plan to resume the flow of sensitive goods — this framework now awaits approval from

Jakub Novak 11:32 2025-06-11 UTC+2

The U.S. and China: A Small Step Forward. What's Next? (Potential for a reversal and decline in EUR/USD and NZD/USD pairs)

Representatives from the United States and China have reached a framework agreement on trade following two days of high-level talks in London. But why isn't there a sense of euphoria

Pati Gani 09:52 2025-06-11 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.