- NZD/USD refreshes an over two-week high near 0.5700 amid weakness in the US Dollar.
- The upbeat market mood amid a delay in Trump’s reciprocal tariff plans has diminished the USD’s safe-haven demand.
- The RBNZ is expected to cut its Official Cash Rate (OCR) by 50 bps to 3.75% on Wednesday.
The NZD/USD pair posts a fresh over two-week high around 0.5700. The Kiwi pair strengthens as the US Dollar (USD) underperforms its peers amid a cheerful market mood. The demand for risk-sensitive assets has increased as fears of an immediate global trade war evaporate.
On Thursday, United States (US) President Donald Trump didn’t reveal a detailed reciprocal tariff plan and guided his team to work on that. However, market participants anticipated that reciprocal tariffs would be announced after Trump’s tweet on his account at Truth Social that that “Three great weeks, perhaps the best ever, but today is the big one: reciprocal tariffs!!! Make America great again!!!”, which came in early North American trading hours on Thursday.
An unexpected delay in Trump’s reciprocal plan diminished the USD’s safe-haven appeal. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, revisits an almost four-week low around 106.80.
Meanwhile, investors await the Reserve Bank of New Zealand’s (RBNZ) first monetary policy meeting of the year, which is scheduled on Wednesday. Traders expect the RBNZ to continue easing the monetary policy further at the current pace of 50 basis points (bps). Such a scenario will be unfavorable for the New Zealand Dollar (NZD).
NZD/USD rebounds strongly from the support zone plotted around 0.5500 on a weekly timeframe. However, the outlook of the Kiwi pair is still bearish as the 20-week Exponential Moving Average (EMA) near 0.5777 is sloping downwards.
The 14-week Relative Strength Index (RSI) attempts to return inside the 40.00-60.00 range. A fresh bearish momentum would trigger if the RSI fails to do the same.
The Kiwi pair could decline to near round-level supports of 0.5400 and 0.5300 if it breaks below the 13-year low of 0.5470.
On the flip side, a decisive break above the November 29 high of 0.5930 could drive the pair to the November 15 high of 0.5970 and the psychological resistance of 0.6000.
NZD/USD weekly chart
