Select Language

NZD/USD falls toward 0.6000 after retreating from eight-month highs

Breaking news

NZD/USD falls toward 0.6000 after retreating from eight-month highs

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2025.06.03 12:14
NZD/USD falls toward 0.6000 after retreating from eight-month highs

update 2025.06.03 12:14

  • NZD/USD loses ground as Terms of Trade Index (Q1) increased 1.9% QoQ in New Zealand, below an expected 3.1% rise.
  • China's Caixin Manufacturing Purchasing Managers' Index contracted to 48.3 in May, against a 50.4 expansion in April.
  • US ISM Manufacturing Purchasing Managers' Index contracted to 48.5 in May from 48.7 in April.

NZD/USD pulls back from an eight-month high of 0.6055, trading around 0.6010 during the Asian hours on Tuesday. The pair depreciates as the New Zealand Dollar (NZD) struggles, possibly due to softer-than-expected Terms of Trade Index data, which increased 1.9% quarter-on-quarter in the first quarter, down from a 3.1% increase in the previous quarter and below market forecasts for a similar 3.1% rise. Export prices rose 7.1%, the largest rise in three years, while import prices climbed 5.1%, the biggest increase in 10 quarters.

Moreover, China's Caixin Manufacturing Purchasing Managers' Index (PMI) unexpectedly declined to 48.3 in May from the previous reading of 50.4, below the expected 50.6 expansion. However, the weekend data showed that the National Bureau of Statistics (NBS) Manufacturing PMI rose to 49.5 in May, from April's 49.0 reading. The NZD could be impacted by Chinese economic data as both countries are close trading partners.

Last week, the Reserve Bank of New Zealand (RBNZ) Assistant Governor Karen Silk noted that interest rates are now within the neutral 2.5%-3.5% band following a 25 basis points rate cut. Silk also said that further policy decisions will be data-dependent.

However, the NZD/USD pair may regain its ground as the US Dollar (USD) may continue to struggle amid growing concerns regarding stagflation in the United States (US). US President Donald Trump threatened to double import tariffs on steel and aluminum, increasing them to 50% from 25%, effective Wednesday.

Institute for Supply Management (ISM) Manufacturing Purchasing Managers' Index eased to 48.5 in May from 48.7 in April. This figure came in weaker than the expectation of 49.5. Traders would likely observe the release of the JOLTS Job Openings later on Tuesday.

New Zealand Dollar FAQs

The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country's central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand's biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand's main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.

The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors' appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.

Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar's (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.

The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called 'commodity currencies' such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.


Date

Created

 : 2025.06.03

Update

Last updated

 : 2025.06.03

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

Fed's Kashkari: Labour market is showing some signs of slowing down

Federal Reserve Bank of Minneapolis President Neel Kashkari said late Wednesday that the labour market is showing some signs of slowing down. However, the central bank must stay in wait-and-see mode to assess how the economy responds to the uncertainty. 
New
update2025.06.05 08:34

USD/CAD remains under selling pressure below 1.3700, BoC held key rate steady 

The USD/CAD pair remains under selling pressure around 1.3675 during the early Asian session on Thursday. Weaker US economic data and mounting economic and political uncertainty weigh on the US Dollar (USD) broadly.
New
update2025.06.05 08:10

GBP/USD sticks close to near-term highs as key labor data looms

GBP/USD caught a bid on Wednesday, paring the previous day's losses and keeping price action on the high side of recent congestion. Bids remain pinned firmly above 1.3500 with key US Nonfarm Payrolls data looming ahead later in the week.
New
update2025.06.05 07:22

AUD/USD threatens psychological resistance as US Dollar bulls back down

The Australian Dollar (AUD) is gaining confidence against the US Dollar (USD) on Wednesday, with bulls eagerly approaching a critical barrier of resistance.
New
update2025.06.05 06:08

NZD/JPY Price Forecast: Pulls back on mixed mood, uptrend faces key test

NZD/JPY retreated after reaching a three-day high of 86.82, dropping towards the 86.00 figure as market appetite turned slightly sour.
New
update2025.06.05 05:57

AUD/JPY Price Forecast: Retails bullish bias, despite retracing from 4-day high

The AUD/JPY erased some of its earlier gains, dropping 0.20% late during Wednesday's North American session, as US equities finished mixed due to worse-than-expected US economic data. At the time of writing, the cross-pair trades at 92.73, after hitting a four-day peak of 93.58.
New
update2025.06.05 05:34

Mexican Peso trades near fresh YTD high against US Dollar

The Mexican Peso (MXN) is trading near a fresh year-to-date high against the US Dollar (USD) on Wednesday, which is providing support for the USD/MXN pair above 19.16. 
New
update2025.06.05 04:53

Canadian Dollar lurches into fresh highs after BoC holds off on rate cuts

The Canadian Dollar caught a rally on Wednesday, bolstered by a rate hold from the Bank of Canada (BoC) following an accelerated string of rate cuts. Broad-market investor sentiment remains pinned on the low side after a disappointing US ADP jobs data print, hobbling the US Dollar.
New
update2025.06.05 04:31

Silver Price Forecast: XAG/USD holds steady near $34.50 as bulls take a breather

Silver price consolidated during Wednesday's session, trading almost flat near $34.50, as traders seem reluctant to push the metal's prices outside of the $34.00-$34.50 range.
New
update2025.06.05 04:21

USD/CHF Price Forecast: Dives below 0.82 as sellers regain control on USD slide

USD/CHF drops from around three-day highs near 0.8250 and tumbles as the Greenback prolongs its agony, following a slight recovery on Tuesday. At the time of writing, the pair trades at 0.8174, down 0.78%.
New
update2025.06.05 03:59

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel