NZD/USD Steadies as CPI Miss Spurs RBNZ Cut Speculation Amid USD Weakness
By tredu.com • 7/21/2025
Tredu
NZD/USD Stabilizes After Weak CPI Triggers RBNZ Cut Speculation
Kiwi Finds Support Despite Soft Inflation Readings
The New Zealand Dollar (NZD) held steady against the US Dollar (USD) on Monday as markets digested a mixed Consumer Price Index (CPI) report from New Zealand and rising global trade tensions. The NZD/USD pair is stabilizing after a brief dip, supported by USD softness and technical buying signals.
Mixed CPI Data Keeps Pressure on RBNZ
Statistics New Zealand reported that Q2 inflation rose 0.5% QoQ, below the 0.6% expected and down from 0.9% previously. The annual CPI figure came in at 2.7%, just under expectations but higher than Q1's 2.5%.
Despite the mild upside in annual inflation, the softer-than-expected numbers reinforced expectations that the Reserve Bank of New Zealand (RBNZ) may consider cutting rates if disinflation persists and economic momentum fades. RBNZ officials have already indicated they’re monitoring growth risks closely and remain open to further easing.
US Dollar Weighed by Trade Tensions
The US Dollar, meanwhile, is under pressure from renewed EU–US trade tensions, adding a supportive tailwind to the Kiwi. As risk appetite softens and Treasury yields slide, the greenback has lost traction against risk-sensitive currencies like the NZD.
“The long lower wick on today's candle indicates strong intraday buying interest, suggesting NZD/USD may find a floor near current levels,” said one analyst.
Key Levels to Watch
- Resistance: $0.6100 psychological mark
- Support: $0.6020 intraday low, followed by $0.5980 demand zone
Conclusion
The near-term outlook for NZD/USD hinges on evolving rate cut expectations from the RBNZ and further developments in global trade. The pair may remain rangebound but supported as long as the USD remains under pressure and RBNZ rhetoric stays dovish.
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