- NZD/USD loses ground as Westpac Consumer Survey indicates weakening consumer confidence in New Zealand.
- Westpac New Zealand reported a decline in its confidence index, falling to 89.2 in Q1 from 97.5 in the prior quarter.
- The US Dollar remains firm as traders adopt caution ahead of the Fed interest rate decision due on Wednesday.
NZD/USD remains subdued for the second consecutive day, hovering around 0.5810 during Wednesday’s Asian session. The pair faces downward pressure following the release of New Zealand’s Q1 2025 Westpac Consumer Survey, which indicated weakening consumer confidence.
Westpac New Zealand reported that its confidence index dropped to 89.2 in Q1 from 97.5 in the previous period, the lowest level since Q2 2024. The decline reflects mounting trade tensions, persistent cost-of-living pressures, and financial market volatility.
However, the NZD/USD pair may find support from market optimism ahead of New Zealand’s quarterly GDP data release on Thursday. Analysts expect a modest 0.4% rebound in Q4, following two consecutive quarters of contraction.
Meanwhile, the US Dollar (USD) remains firm, underpinned by stable Treasury yields as investors await the Federal Reserve’s (Fed) interest rate decision later in the day. Markets widely anticipate the Fed will hold rates steady amid ongoing inflation concerns and economic uncertainty.
The US Dollar Index (DXY) trades near 103.30, while US 2-year and 10-year Treasury yields stand at 4.04% and 4.29%, respectively. However, the Greenback faces pressure from weak US economic data and renewed tariff threats from President Donald Trump, adding to market uncertainty.
Traders are closely monitoring the Fed’s updated economic projections for insights into the future path of US interest rates. Any hawkish signals could further strengthen the USD against its counterparts.
