Top.Mail.Ru
empty
30.04.2025 12:43 AM
NZD/USD: Bullish Prospects Amid Uncertainty

Although the past week was completely uninformative regarding fundamental indicators, it allowed adjustments to forecasts on economic growth, inflation, and the Reserve Bank of New Zealand's policy strategy based on new data.

ANZ Bank revised its inflation forecast. Earlier, it had downgraded its projections for GDP growth, the labor market, and housing prices—each of which alone would be sufficient to expect a more aggressive rate-cutting stance from the RBNZ. On inflation, ANZ maintains a firm position that inflation is virtually under control—despite it having risen in Q1 from 2.2% to 2.5% year-over-year, the highest level since June last year. While claiming that inflation is decelerating, ANZ analysts offer numerous well-founded arguments, which we'll take at face value for now.

This image is no longer relevant

According to ANZ, overall inflation will slow to about 1.7% by mid-2026 and rise to 2% by 2027. While such long-range forecasting may seem somewhat naive in today's uncertain environment, the more important takeaway is that projections for GDP, labor, and inflation allow us to forecast the RBNZ's interest rate decisions. Such projections, in turn, shape future yields—and, therefore, the exchange rate.

The trend suggests a faster pace of rate cuts here. Currently, markets expect rates to be lowered to 2.5%, but some are already suggesting the terminal rate may go even lower—to around 2%—especially if the threat of a recession resurfaces alongside disinflation.

BNZ Bank, on the other hand, holds an entirely different view and warns that "inflation is neither dead nor buried. It is already trending upward in annual terms, and early signs indicate inflation expectations—especially among households—are rising (from 4.2% to 4.7%)." The bank cautions the RBNZ against cutting rates too quickly.

All this points to a backdrop of confusion, volatility, and uncertainty. In such a tense environment, it is better to rely on actual capital flows, yields, and futures market positioning, as these reflect the real intentions of major players.

The net short position on NZD narrowed by $346 million last week, bringing the total to—$1.6 billion, the smallest short position since early December last year. The Kiwi remains in negative territory—where it fell immediately after Trump's election as U.S. president—but since February, the trend has shifted in favor of the New Zealand dollar. Its fair value remains above the long-term average, with no signs of a reversal to the downside for now.

This image is no longer relevant

Last week, the NZD/USD pair reached strong resistance at 0.6030 but failed to break through on the first attempt. The likelihood of a pullback has increased, with immediate support seen at 0.5896. However, if Friday's U.S. labor market report indicates economic resilience, the pair could fall further—into the 0.5815/50 range. For now, there is little justification for a full-fledged reversal to the downside; the expected decline is viewed as a correction, and a renewed rally is anticipated, with another attempt to gain a foothold above 0.6030.

If successful, there will be no strong technical resistance levels until the local high of 0.6362 (from September 30). However, political uncertainty is unlikely to support such a strong advance.

Kuvat Raharjo,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

U.S. Dollar – Weekly Preview

The American news background will once again play a key role for the dollar and, therefore, for the market and the vast majority of instruments. This past week, only

Chin Zhao 00:34 2025-06-30 UTC+2

British Pound – Weekly Preview

The situation for the British pound in the market and news landscape is quite similar. For the pound, two rate cuts by the Bank of England in 2025 or zero

Chin Zhao 00:34 2025-06-30 UTC+2

Euro Currency – Weekly Preview

In the upcoming week, the euro is expected to maintain demand in the market. Currently, all events are aligning in its favor. I previously wrote that only the wave structure

Chin Zhao 00:33 2025-06-30 UTC+2

The Yen Has Lost Its Bullish Momentum

The Consumer Price Index (CPI) in the Tokyo region declined in June from 3.4% to 3.1% year-over-year, marking the first signal so far that may indicate a slowdown in price

Kuvat Raharjo 12:21 2025-06-27 UTC+2

EUR/JPY. Analysis and Forecast

The EUR/JPY pair is regaining positive momentum during today's trading session, reversing its recent decline.The euro continues to benefit from the prevailing sentiment of selling the U.S. dollar

Irina Yanina 12:17 2025-06-27 UTC+2

Inflation in Canada Remains Too High – USD/CAD May Accelerate Its Decline

Inflation in Canada remains too high to expect a rate cut by the Bank of Canada at its upcoming meeting. In April, inflation sharply slowed to 1.7% y/y, and most

Kuvat Raharjo 11:16 2025-06-27 UTC+2

XAU/USD. Analysis and Forecast

Gold is drawing renewed selling interest today after breaking below the key $3300 level. Traders are awaiting the release of the U.S. Personal Consumption Expenditures (PCE) Price Index, which

Irina Yanina 10:47 2025-06-27 UTC+2

PCE Index Data Unlikely to Significantly Impact Market Dynamics (Potential for Renewed Growth in EUR/USD and Bitcoin)

The easing of tensions in the markets, following a pause in the military conflict in the Middle East, supports the return of the previous paradigm—an increase in demand for stocks

Pati Gani 09:52 2025-06-27 UTC+2

The Market Is Off the Leash

Greed has returned to the markets. While professionals warn about the need for caution amid geopolitical uncertainty, trade wars, and the state of the U.S. economy, retail investors are once

Marek Petkovich 09:16 2025-06-27 UTC+2

What to Pay Attention to on June 27? A Breakdown of Fundamental Events for Beginners

There are relatively few macroeconomic reports scheduled for Friday. Some experts refer to the PCE indicator as "important" and "the Fed's favorite," but we do not share that view

Paolo Greco 07:02 2025-06-27 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.