New Zealand dollar (NZD) Market Update
The New Zealand dollar (NZD) faced downward pressure amidst a cautious market sentiment, leading to losses against several major currencies. The NZD experienced struggles in February, particularly against the USD, as global rate expectations shifted and commodity prices declined. This resulted in the NZD sliding below key levels against the AUD, Euro, GBP, and yen after touching decade highs above 93. Despite the challenging environment, the NZD outperformed the Aussie dollar and the yen during this period.
FX analysts and economists expect the near-term outlook for the NZD to continue facing downside pressure, with the currency likely fluctuating between 0.60 and 0.62 against the USD until a clearer path to US rate cuts emerges. The currency is currently trading below its 3-month averages against the USD, EUR, and GBP, reflecting its recent struggles. While domestic data and global growth outlook will impact the NZD's direction, developments in US and global rates will be critical factors to monitor moving forward. The market view remains focused on US activity, labor market performance, and inflation data for indications of potential Federal Reserve policy changes.