NZDUSD on Friday rose 0.21% to 0.61090. Week ending 2024-10-11 moved lower by -0.8%. What you need to know.

NZDUSD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	0.21%	13 Pips
Week 2024-10-11	-0.8%	-49 Pips
October	-3.72%	-236.3 Pips

Upcoming key events for the new week (London Time)

Mon 06:00 AM Columbus Day
Tue 10:45 PM CPI Inflation Rate (3-mth)
Tue 10:45 PM CPI Inflation Rate (12-mth)
Thu 01:30 PM Initial Unemployment Insurance Claims
Thu 01:30 PM Monthly Retail Trade (1-mth)

What happened over the week

In the United States, several key economic indicators reveal a mixed economic climate. The University of Michigan reported a decline in the Index of Consumer Sentiment for October’s flash estimate, dropping to 68.9 from 70.1 in September. Meanwhile, the Bureau of Labor Statistics indicated that the Producer Price Index (PPI) for September remained stagnant at 0%, following a 0.2% rise in August. Notably, the PPI, excluding food and energy, increased from 2.4% to 2.8% on a year-over-year basis, although it saw a slight month-on-month decrease from 0.3% to 0.2%. The U.S. Initial Unemployment Claims rose significantly to 258,000, marking the highest level since August 2023. The Consumer Price Index (CPI) showed a consistent increase of 0.2% for the month, symbolizing the smallest 12-month rise of 2.4% since February 2021, as reported by the Bureau of Labor Statistics.

In New Zealand, the Reserve Bank of New Zealand (RBNZ) decided to cut the Official Cash Rate (OCR) from 5.25% to 4.75%. This decision signals an attempt to stimulate the economy, possibly in response to weakening economic conditions. Such a reduction in the interest rate typically aims to lower borrowing costs, encourage spending and investment, and ultimately boost economic growth. This monetary policy change reflects a shift toward an accommodative stance by the RBNZ.

The recent economic developments in both the U.S. and New Zealand may have several implications on the NZDUSD currency pair. The decline in the U.S. Consumer Sentiment, along with the stagnation in PPI and rising unemployment claims, could exert downward pressure on the U.S. dollar, as these indicators point to a potential slowing in economic activity. On the other hand, the rate cut by the RBNZ may initially put pressure on the New Zealand dollar, as lower interest rates generally reduce the currency’s attractiveness to yield-seeking investors. However, the prospect of future economic stimulation could subsequently support the NZD. Together, these factors suggest a potential for increased volatility in NZDUSD in the short term, as market participants weigh the impacts of these contrasting economic policies and data releases.

From X (Twitter)

The Monetary Policy Committee today agreed to cut the Official Cash Rate (OCR) to 4.75%. They agreed that it is appropriate to cut the OCR by 50 basis points to achieve and maintain low and stable inflation, while seeking to avoid instability in employment, interest rates and the… pic.twitter.com/tw7Ri18oPU

— Reserve Bank of NZ (@ReserveBankofNZ) October 9, 2024

What can we expect from NZDUSD for the new week and what happened on Friday?

NZDUSD on Friday rose 0.21% to 0.61. Price is below 9-Day EMA while Stochastic is rising. For the week ending 2024-10-11, the pair dropped -0.8% or -49 pips lower.

Looking ahead, NZDUSD looks mixed as the pair is likely to consolidate above week low of 0.61.

For the new week, our technical outlook looks bearish, immediate support level is at 0.60 (WS1) with break below could see further selling pressure towards 0.59 (WS2). For potential buyers, as the current momentum is bearish, we prefer to look at firm break of the week high of 0.62 as an important indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below week low of 0.61 would indicate selling pressure.

For the month of October, NZDUSD is down by -3.72% or -236.3 pips lower.

Weekly key levels to watch out:

You might also be interested in:

Business Formation Statistics Source: Census Bureau
Monthly Wholesale Trade: Sales and Inventories Source: Census Bureau
Minutes of the Federal Open Market Committee, September 17-18, 2024 Source: Federal Reserve
OCR 4.75% – Monetary restraint reduced as inflation converges to target Source: RBNZ
U.S. International Trade in Goods and Services, August 2024 Source: Bureau of Economic Analysis
U.S. International Trade in Goods and Services Source: Census Bureau