NZD/USD price steadies near $0.565 ahead of U.S. inflation data
NZD/USD consolidates as Fed’s hawkish stance
The New Zealand dollar (NZD/USD) stabilized around 0.5650 on Wednesday as traders awaited the US Consumer Price Index (CPI) data later in the day. The currency remains in a neutral range between 0.5595 and 0.5720, with no clear momentum in either direction.
The 14-day Relative Strength Index (RSI) hovering near 50 suggests a balanced market between buyers and sellers, keeping the pair range-bound.
NZD/USD price dynamics (Dec 2024 - Feb 2025) Source: TradingView.
U.S. economic outlook supports dollar strength
Federal Reserve Chair Jerome Powell reaffirmed that the Fed is in no hurry to cut rates, citing a strong U.S. economy and persistent inflation concerns. This has bolstered the US dollar, keeping risk-sensitive currencies like the Kiwi under pressure. Additionally, President Donald Trump’s decision to increase tariffs on steel and aluminum imports has raised concerns over global trade tensions, which could further weigh on the New Zealand dollar.
Domestically, the Reserve Bank of New Zealand (RBNZ) is expected to cut interest rates by 50 basis points next week amid signs of a weakening economy. This expectation adds downside risks for NZD/USD, as monetary policy divergence between the RBNZ and the Fed favors the U.S. dollar in the near term.
Technical outlook: Key levels to watch
NZD/USD faces immediate resistance at the nine-day EMA of 0.5654, with further hurdles at 0.5794 and the psychological level of 0.5800. On the downside, a drop below 0.5650 could push the pair towards 0.5550, with the next key support at 0.5516—its lowest level since October 2022.
On the basis of previously analyzed charts, NZD/USD remains range-bound, but a break below 0.5650 could accelerate losses, while a move above 0.5720 would strengthen bullish sentiment.
