NZD/USD Slips Below 0.5950 Amid Risk-Off Mood and Dovish RBNZ Outlook

NZD/USD Slips Below 0.5950 as Risk-Off Sentiment and Dovish RBNZ Weigh on Kiwi

The New Zealand dollar weakened against the US dollar on Thursday, with NZD/USD falling to 0.5925 during the Asian session — down 0.42% on the day. The pair lost momentum as global markets turned cautious, pressured by weak US inflation data, a dovish stance from the Reserve Bank of New Zealand (RBNZ), and lingering concerns about global trade uncertainty.

Weaker US PPI Data Softens Dollar Outlook

On Wednesday, the US Bureau of Labor Statistics reported that the Producer Price Index (PPI) remained unchanged in June, falling short of the 0.2% increase forecast by analysts. The core PPI, which excludes volatile food and energy components, rose 2.6% year-over-year, easing from the previous 3.0% and slightly below expectations.

The soft inflation data reinforces the view that the Federal Reserve is likely to maintain interest rates in the 4.25%–4.50% range at its July policy meeting. Fed officials have expressed caution about the broader economic impact of trade tariffs and prefer to wait for more clarity before adjusting policy.

RBNZ’s Dovish Tone Caps Kiwi's Gains

Although the New Zealand dollar often benefits from strong Chinese economic performance — and recent Chinese GDP data came in better than expected — any upside in the Kiwi remains limited. The Reserve Bank of New Zealand (RBNZ) has maintained a dovish outlook amid slowing domestic inflation and signs of economic softening.

With the RBNZ unlikely to raise rates in the near term, the New Zealand dollar remains under pressure against its US counterpart, especially in a risk-averse trading environment.

Looking Ahead: US Retail Sales in Focus

Market attention now turns to the upcoming release of US Retail Sales data for June, scheduled later Thursday. A stronger-than-expected report could bolster the US dollar further, putting more downward pressure on NZD/USD. Conversely, any weakness in retail spending might offer the Kiwi temporary relief.

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