The market bias for the USD to NZD exchange rate is currently bullish, with the USD gaining traction.
Key drivers include the interest rate differential, as the Federal Reserve has maintained a firmer stance while the Reserve Bank of New Zealand has recently cut rates. Geopolitical tensions, particularly U.S. airstrikes affecting global sentiment, also contribute to the USD's strength. Additionally, recent U.S. labor market data showed a decrease in unemployment, boosting confidence in the dollar.
In the near term, the USD/NZD exchange rate may remain in a stable trading range, given its recent performance around 1.7456, with fluctuations expected around this level.
Upside risks could stem from unexpected hawkish comments from U.S. Federal Reserve officials that might strengthen the USD further. Conversely, downside risks could arise if the market sees broader risk-off sentiments, leading to a stronger NZD response.