Bias: Range-bound, with USD/NZD near the 90-day average and in the middle of the three-month range.
Key drivers:
- Rate gap: The US Federal Reserve is expected to ease toward a neutral stance in coming months, while the Reserve Bank of New Zealand has already begun easing; the growing policy gap tends to pull USD/NZD higher if US data remains firm.
- Macro factor: US payrolls and unemployment trends shape near-term USD strength; a stronger payrolls report can keep the dollar firm amid mixed signals.
- Risk appetite: A risk-on mood supports the kiwi more than the dollar, potentially trimming USD/NZD if risk appetite improves as markets stabilize.
Range: Movement is likely to stay inside the recent calm range, with a mild drift toward the upper part if US data stays firm and volumes stay light.
What could change it:
- Upside risk: Unexpectedly strong US data or hawkish Fed signals that keep the USD firm.
- Downside risk: Softer US data or a dovish Fed tone that weighs on the USD.
