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New Zealand’s ruling coalition has a slim majority in preliminary election results, although the outcome remains uncertain as about 14% of the votes have yet to be counted. The final results will determine which political group will govern the country for the next three years.
The tightest vote in years marked a significant setback for the country’s two major political parties, the center-right National Party, led by Christopher Luxon, and the center-left Labour Party, headed by Chris Hipkins, as voters threw more support behind minor parties on the ideological flanks than before.
Currently, New Zealand’s governing right-leaning bloc holds a narrow lead with 67 seats in an expanded 131-seat parliament. But that may be overturned as the remaining votes are counted, with the final results due November 27.
Market reaction
At the press time, the NZD/USD pair is adding 0.37% on the day to trade at 0.5560.
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
- AUD/USD posts modest losses near 0.6860 in Monday’s early Asian session.
- US NFP rose by 165,000 in October, above the market consensus.
- RBA hikes the OCR to its highest level in 18 years last week.
The AUD/USD pair trades with mild losses around 0.6860 during the early Asian session on Monday. Stronger-than-expected US employment data provide some support to the US Dollar (USD) against the Australian Dollar (AUD). Traders brace for China’s Consumer Price Index (CPI) inflation report, which is due later in the day.
Data released by the US Bureau of Labor Statistics (BLS) on Friday showed that Nonfarm Payrolls (NFP) climbed by 165,000 in October. This figure followed a 60,000 rise in September (revised from 29,000) and surpassed market expectations of 65,000. Meanwhile, the Unemployment Rate declined to 4.1% in October from 4.2% in September.
Traders raise their bets on a further quarter percentage point hike at the December policy meeting. Probability rose to 79.6%, according to the CME FedWatch tool, though the indicator pointed to only one more increase after.
On the Aussie front, the Reserve Bank of Australia (RBA) decided to lift the Official Cash Rate (OCR) by 25 basis points (bps) to 4.85% from 4.60%. This put the cash rate at the highest level Australia has seen since 2008.
In its monetary policy statement, the Australian central bank said inflation remains elevated and is forecast to continue to do so through much of 2027. Treasurer Jim Chalmers acknowledged the government "has more work to do" to help bring down inflation.
Aussie slides as risk selloff and RBA credibility worries weigh
Strategists at Societe Generale highlight that AUD/USD traded in a “0.6862 - 0.6954 overnight range,” with spot “skid[ding] below 0.69 for first time since early July” and now “on track for lowest weekly close since January.” They flag nearby “support 0.6865, resistance 0.7080,” and note that the move has been compounded by policy concerns after Hauser “warns public confidence in ability of RBA to counter inflation is at risk.” According to Societe Generale, broader “FX spillovers from the selloff in stocks surfaced in the AUD, the SEK and NZD in G10,” while “the KRW and MXN rank among the worst performers in EM.”
Daly flags more tightening as strong jobs data keeps Fed focused on inflation
Fed’s Daly delivered a distinctly more hawkish tone, with an FXS Speechtracker score of 8/10 compared to the established baseline of 6.4/10, underscoring that “real wages are falling” even as the job report is “good news” and wage growth “isn’t booming.” The emphasis that inflation has been “high for too long,” must remain the “number 1 priority,” and that policy “will have to tighten further” while the strong labor market gives the Fed “latitude” reinforces a bias toward additional rate hikes, albeit in a “deliberate” and data-dependent manner. Overall, the message leans toward further tightening risk, with only limited concern about a substantial growth slowdown and some acknowledgement that AI-related repricing and demand cooling could modestly temper activity.
The FXS Fed Sentiment Index rose by 0.95 points to 143.10, firmly in hawkish territory and consistent with the above-baseline FXS Speechtracker reading. This move signals that markets should interpret Daly’s remarks as incrementally hawkish for the Dollar, with elevated odds of further policy tightening remaining in focus.
Technical Analysis: AUD/USD keeps a bearish vibe under the 100-day SMA
In the daily chart, AUD/USD extends its decline with a clear bearish bias as spot holds below all key moving averages and the entire Bollinger envelope. The 20-period simple moving average (SMA) from the Bollinger Bands and the 100-day SMA, reinforces a topside cap, while the Relative Strength Index (14) near 33 suggests lingering downside pressure, though approaching oversold territory.
On the topside, initial resistance emerges at the lower Bollinger Band around 0.6875, with the Bollinger midline at 0.6985 acting as the next hurdle before the 100-day SMA near 0.7025 and the upper Bollinger Band at 0.7090. As no meaningful support levels are evident below the current price in this framework, a sustained break back above 0.6875 would be the first signal that sellers are losing immediate control, while failure to do so keeps the door open for further weakness.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
US President Donald Trump said that it’s “highly unlikely” he will order more strikes on Iran if progress is made in talks over its nuclear program and reopening the Strait of Hormuz, CNN reported on Sunday.
“It depends on whether or not they sign a very strong agreement,” said Trump. “The answer is highly unlikely it will be necessary.” “I would if necessary, but we hit them really hard,” Trump added.
Diplomatic efforts regained attention following last week's US midterm elections, as Qatar, the chief mediator between the US and Iran, stated that Iran was reviewing proposals concerning its nuclear programme.
However, Iranian Foreign Minister Abbas Araghchi said on Sunday that mediators had made no progress or taken any action in recent days since the US elections. Araghchi stated that US election outcomes pause mediators' efforts, adding that Tehran must wait for mediators to restart the diplomatic process.
Iran’s Islamic Revolutionary Guard Corps (IRGC) said on Saturday that two oil tankers were burning after striking naval mines in and near the Strait of Hormuz.
Elsewhere, Reuters reported production was halted on Sunday at Iraq's Khor Mor gas field in the Kurdistan region after a drone attack hit the field.
The Iranian-backed Houthis in Yemen attacked and damaged one of the landmarks of the Saudi Arabian capital’s financial district. Meanwhile, the offices of oil giant Saudi Aramco suffered minor damage as the city fended off a new barrage of ballistic and cruise missiles on Sunday.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
Commerzbank strategists note that Taiwan’s October CPI eased to 2.33% year-on-year, below expectations but still above the Central Bank of the Republic of China’s (CBC) 2% alert threshold. Meanwhile, PPI surged 19.7%, raising concerns over future consumer price pressures. The CBC intervened to support the Taiwan Dollar (TWD) amid heavy foreign equity outflows, while foreign exchange reserves fell to USD596.4bn.
Soft CPI, record PPI pressures
"October consumer price index (CPI) rose 2.33% yoy (Bloomberg consensus: 2.60%) vs an upwardly revised 2.74% in September. Core CPI came in at 2.23% yoy, also below the 2.30% consensus. The softer headline print offers some near-term relief on the inflation front, though it marks the sixth consecutive month that CPI has remained above the Central Bank of the Republic of China’s (CBC) 2% alert threshold, keeping the policy debate alive."
"The lower CPI reading was led by softer food and energy price pressures. However, the producer price index told a starkly different story, surging 19.7% yoy in October, the fastest pace on record. The disconnect between softening consumer prices and surging upstream costs suggests that margin compression at the producer level remains acute. As such, pass-through to final consumer prices cannot be ruled out in the months ahead."
"Compounding the inflation picture, Taiwan’s foreign exchange reserves fell USD4.3bn to USD596.4bn at end-October, as the CBC confirmed it intervened in the currency market to cushion the TWD against heavy foreign equity outflows. The CBC’s FX department reported a net foreign outflow of approximately USD28bn for the month. The central bank also disclosed it used USD proceeds from the swap market to purchase US Treasuries in October, a mechanism that helped limit the drawdown in reserves."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- XAG/USD forms consecutive dojis, signaling indecision around the $52.00 level.
- Bearish RSI flattens, suggesting consolidation despite persistent downside risks.
- A break below $48.96 exposes $48.62, followed by $45.56 and $45.00.
Silver (XAG/USD) price consolidates near $52.00, up a minimal 0.19% on Friday as the Greenback rallies sharply, posting strong US data. Back-to-back ‘doji’ candles indicate that neither buyers nor sellers are in control.
XAG/USD Price Forecast: Technical outlook
Silver’s technical view remains downward-biased, with bulls finding key resistance at the $55.00 figure. Momentum remains bearish, as indicated by the Relative Strength Index (RSI), which has turned flat, hinting at further sideways trading.
If XAG/USD drops below Wednesday’s low of $48.96, it could open the door to a drop toward Thursday's low of $48.62. A breach of the latter will expose the October 28, 2025, swing low of $45.56, before testing the psychological $45.00 figure.
On the other hand, if Silver is headed for a bullish reversal, investors must clear the $55.00 figure. The next area of interest is $60.00, where the 50-day Simple Moving Average (SMA) lies. Once that key resistance area is surpassed, up next is the 100-day SMA at $60.73, followed by the $65.00 milestone.
XAG/USD Price Chart – Daily
(This story was corrected on November 6 at 21:00 GMT to say that $48.96 is Wednesday's low, not Thursday's.)
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
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