The NZD/USD pair saw a slight decline after three days of gains, attributed to a rebound in the US Dollar. The US Dollar Index (DXY) was hovering around 105.20, limiting the Greenback’s advance despite lower US Treasury yields. The softer-than-expected US jobs data released on Friday raised hopes for potential interest rate cuts by the US Federal Reserve, leading to a decline in the US Dollar. Fed Chair Jerome Powell’s dovish stance on monetary policy outlook also contributed to the prevalent risk appetite among investors.
On the Kiwi’s side, China’s Caixin Services Purchasing Managers’ Index (PMI) slightly decreased in April but still showed growth in services activity for the 16th consecutive month. This positive trend has the potential to boost New Zealand’s market, as it is one of the largest exporters to China. The Reserve Bank of New Zealand (RBNZ) recently announced its intention to delay any shift towards monetary easing until 2025 due to higher-than-expected inflation pressures in the first quarter. This decision is likely to support the New Zealand Dollar (NZD), providing a strong foundation for the NZD/USD pair.
Overall, the recent developments in the US and New Zealand economies have influenced the NZD/USD pair’s movement. The rebound in the US Dollar following the softer jobs data release and the Fed’s potential interest rate cuts have put pressure on the pair. On the other hand, the positive growth in China’s services activity and RBNZ’s decision to delay monetary easing have supported the New Zealand Dollar and the NZD/USD pair. Traders and investors will continue to monitor key economic indicators and central bank policy decisions to gauge the future direction of the currency pair.
In conclusion, the NZD/USD pair experienced a slight decline due to a rebound in the US Dollar, driven by softer-than-expected US jobs data and expectations of Fed interest rate cuts. On the other hand, positive growth in China’s services activity and RBNZ’s decision to delay monetary easing have provided support for the New Zealand Dollar and the NZD/USD pair. As market conditions evolve, traders will closely watch economic data releases and central bank announcements to determine the direction of the currency pair in the coming days and weeks.
