Forex News
- NZD/USD jumps to near 0.5967 as RBNZ Governor Breman supports quick and steeper interest rate hikes.
- RBNZ’s Breman expresses that the committee is focused on cooling inflationary pressures.
- Investors await US President Trump’s approval of the 60-day MoU with Iran.
The NZD/USD pair trades 0.55% higher to near 0.5967 during the European trading session on Friday and is up 2% so far this week. The Kiwi pair extends its winning streak for the third trading day amid hopes that the Reserve Bank of New Zealand (RBNZ) will adopt an ultra-hawkish monetary policy stance to bring inflation lower.
New Zealand Dollar Price This week
The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies this week. New Zealand Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.02% | 0.26% | 0.27% | -0.00% | -0.04% | -1.47% | -0.26% | |
| EUR | 0.02% | 0.31% | 0.32% | 0.02% | -0.05% | -1.45% | -0.21% | |
| GBP | -0.26% | -0.31% | -0.24% | -0.30% | -0.36% | -1.76% | -0.51% | |
| JPY | -0.27% | -0.32% | 0.24% | -0.29% | -0.35% | -1.77% | -0.55% | |
| CAD | 0.00% | -0.02% | 0.30% | 0.29% | -0.06% | -1.48% | -0.20% | |
| AUD | 0.04% | 0.05% | 0.36% | 0.35% | 0.06% | -1.40% | -0.20% | |
| NZD | 1.47% | 1.45% | 1.76% | 1.77% | 1.48% | 1.40% | 1.27% | |
| CHF | 0.26% | 0.21% | 0.51% | 0.55% | 0.20% | 0.20% | -1.27% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).
Earlier in the day, RBNZ Governor Anna Breman said that the interest rates were likely to increase sooner and by more than previously signalled to combat inflation, Reuters reported. Breman added, "The committee remains focused on ensuring inflation returns to target while avoiding unnecessary volatility in the economy."
This was the second time this week when RBNZ Governor Breman stressed on tightening monetary conditions to slow down the inflation growth. “Committee sees inflationary pressures going forward, agrees cash rate needs to be higher going forward,” Breman said on Wednesday after the central bank decided to leave the Official Cash Rate (OCR) steady at 2.25%.
Meanwhile, investors await the approval of the United States (US)-Iran agreement to a 60-day Memorandum of Understanding (MoU) by President Donald Trump. As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades marginally higher to near 99.10.
NZD/USD technical analysis
NZD/USD trades higher at around 0.5967 at press time. The pair holds above the 20-day exponential moving average (EMA) at 0.5894, keeping the near-term tone constructive as price extends its recovery from last week’s lows.
The Relative Strength Index (RSI) hovers near 59, hinting at firm but not yet overbought bullish momentum while the spot price pivots around the opening level for the day.
On the downside, initial support is seen at the 20-day EMA around 0.5894, where a break would expose deeper losses toward the May 26 low at 0.5831. On the upside, the pair could pivot to a fresh leg of rally if it manages to extend its advance above the May 6 high at 0.5991. Looking up, the major resistance zone will be the February 26 high at 0.6014, followed by the February 18 high at 0.6054.
(The technical analysis of this story was written with the help of an AI tool.)
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.
- EUR/USD rebound from 1.1585 lows has stalled below the range top, at 1.1660.
- An extension of the US-Iran truce has triggered a moderate risk appetite.
- Mixed Eurozone data has weighed on the Euro, as traders await German inflation numbers.
The Euro (EUR) holds moderate losses against the US Dollar (USD) on Friday, with price action trapped within the last two weeks’ trading range, below 1.1660. The risk relief triggered by the US-Iran peace extension has been offset by a string of mixed Eurozone figures, and investors await German inflation figures to confirm expectations that the European Central Bank will hike rates in June.
News that Washington and Tehran have reached a memorandum of understanding to extend the ceasefire for 60 days and allow negotiations on Iran’s nuclear program to continue has brightened market sentiment. Market optimism, however, remains moderate as the agreement still needs to be ratified by the US and Iranian governments.
In the Eurozone, data from France disappointed, with the Q1 Gross Domestic Product (GDP) Contracting. Inflation figures in France and Spain undershot expectations, although they remain at levels well above the ECB’s 2% target. On the positive side, the German Unemployment Rate declined unexpectedly in April, and the Italian Q1 GDP accelerated.
The market is now focusing on Germany's preliminary Harmonized Index of Consumer Prices (HICP) data for May, due later on Thursday. German consumer inflation is also expected to have moderated this month, following a sharp acceleration in April and March, boosted by the energy shock stemming from Iran’s war.
Technical Analysis: Bulls need to break above 1.1660
EUR/USD trades at 1.1643, holding a neutral-to-bullish stance. The 4-hour Relative Strength Index (RSI) consolidates above the key 50 level, with a slightly positive Moving Average Convergence Divergence (MACD) reading hinting at a mild positive momentum. The pair, however, needs to breach the 1.1660 level to confirm a bullish reversal.
If 1.1660 finally gives way, the focus would shift to the May 14 high, at 1.1720, which might test bulls ahead of May's peak, in the 1.1790 area. Bearish attempts, on the contrary, remain contained above 1.1625 on Friday, which is guarding the bottom of the range, near 1.1575 (May 21 low). Further down, the next target emerges at the April bottom in the 1.1505-1.1525 area.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
Harmonized Index of Consumer Prices (MoM)
The Harmonized Index of Consumer Prices (HICP), released by the German statistics office Destatis on a monthly basis, is an index of inflation based on a statistical methodology that has been harmonized across all European Union (EU) member states to facilitate comparisons. The MoM figure compares the prices of goods in the reference month to the previous month. Generally, a high reading is bullish for the Euro (EUR), while a low reading is bearish.
Read more.Next release: Fri May 29, 2026 12:00 (Prel)
Frequency: Monthly
Consensus: 0.2%
Previous: 0.5%
Source: Federal Statistics Office of Germany
Economic Indicator
Harmonized Index of Consumer Prices (YoY)
The Harmonized Index of Consumer Prices (HICP), released by the German statistics office Destatis on a monthly basis, is an index of inflation based on a statistical methodology that has been harmonized across all European Union (EU) member states to facilitate comparisons. The YoY reading compares prices in the reference month to a year earlier. Generally, a high reading is bullish for the Euro (EUR), while a low reading is bearish.
Read more.Next release: Fri May 29, 2026 12:00 (Prel)
Frequency: Monthly
Consensus: 2.8%
Previous: 2.9%
Source: Federal Statistics Office of Germany
Brown Brothers Harriman highlights that the New Zealand Dollar (NZD) is outperforming, with NZD/USD approaching the 0.6000 resistance as New Zealand business sentiment improves and RBNZ Assistant Governor Silk signals all options, including a 50 bps hike, are on the table for July.
Kiwi supported by hawkish RBNZ
"NZD is outperforming across the board and NZD/USD is closing in on key resistance at 0.6000. The ANZ business activity outlook lifted 6 points in May to +25.6, indicative of an ongoing recovery in real GDP growth."
"RBNZ Assistant Governor Silk, who voted in favor of keeping rates on hold at 2.25% this week, said all options will be on the table at the next July 8 RBNZ meeting, including a jumbo 50bps hike."
"The swaps curve implies 85% odds the RBNZ delivers a first 25bps rate hike in July and a total of 115bps of tightening over the next twelve months. The RBNZ policy path projection is less aggressive and implies 75bps of hikes by Q2 next year."
"Bottom line: NZD/USD can lift above 0.6000 if the energy shock continues to fade. But New Zealand’s negative output gap is likely to temper RBNZ tightening bets and limit a more pronounced upswing in NZD."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Kansas City Federal Reserve (Fed) Bank President Jeffrey Schmid said during the European trading session on Friday that elevated energy prices are diminishing households’ purchasing power.
Additional remarks
Some evidence AI is depressing hiring but not driving firing.
US economy less exposed to energy shock relative to the past.
Main focus is on getting inflation back to 2% target.
So far, US energy producers have not been moving to invest in more production.
Most data points to continued economic growth.
Job market in balance, buoyed in part by healthcare hiring.
Fed must signal commitment to lowering inflation.
My primary concern is inflation, which is ‘too hot’.
I place little stock in believing recent inflation jump is transitory.
Low hiring is a more general phenomenon, not only due to AI.
The Fed must signal commitment to price stability.
Market reaction
There seems to be no immediate response by the US Dollar (USD) to Fed Schmid's comments. As of writing, the US Dollar Index (DXY) trades 0.1% higher at around 99.10.
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
- WTI Oil hits fresh monthly lows sub-$86, on track for a 15% decline in the last two weeks.
- News of a US-Iran truce extension has triggered a moderate risk appetite.
- EIS Crude Oil Stocks Change figures revealed that US Oil reserves dropped for the fifth consecutive week.
Crude prices trend lower for the third day in a row on Friday, with the US benchmark West Texas Intermediate (WTI) barrel trading around $86.50 at the time of writing after hitting one-month lows a few pips below $86.00. WTI Oil is on track for a nearly 15% decline over the last two weeks.
A moderate risk-relief rally following news that Washington and Tehran have reached a memorandum of understanding to extend the ceasefire for 60 days sent oil prices and the safe-haven US Dollar lower, boosting a moderate rebound on equity markets on Friday.
The agreement, still pending US President Donald Trump’s approval, would allow negotiations on Iran’s nuclear program to continue and, according to Axios, would also lift restrictions on sea traffic through the Strait of Hormuz. Investors, however, have taken the news with only lukewarm enthusiasm.
On Thursday, data from the US Energy Information Agency (EIA) revealed that crude Oil inventories declined by 3.327 million barrels in the week of May 22. This is a softer drawdown than the 5 million forecast and less than half the 7.864 million barrels drop seen in the previous week. That said, it makes the fifth consecutive weekly decline and highlights the depletion of US energy stockpiles since the start of the Middle East conflict, keeping Oil prices from depreciating further.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
DBS strategist Philip Wee notes markets have strong expectations that the European Central Bank will hike at its next meeting, even as the Federal Reserve (Fed) debates internal reforms.
ECB tightening supports EUR/USD
"Newly sworn-in Fed Chair Kevin Warsh will still face his first true test at managing a divided Fed at the June 16-17 FOMC. The committee voted 8-4 to keep the Fed Funds Rate unchanged at the April meeting, with one member favouring a 25-bps cut and three members objecting to maintaining the easing bias language.
"Against this background, it was not surprising that ECB President Christine Lagarde believed the Fed’s independence was still at risk."
"While the Fed debates internal structural reforms, other major central banks are playing a more straightforward defensive game."
"The markets have the strongest bets for the European Central Bank, the Bank of Japan, and the Reserve Bank of New Zealand to hike at their next meetings."
"A DXY Index below 98 could send EUR/USD back above 1.18."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Philip Wee of DBS Group Research highlights that US Treasury yields have eased as PCE inflation moderates, but headline inflation remains elevated, keeping real Fed Funds Rates in focus. New Fed Chair Kevin Warsh faces a divided FOMC at the June meeting, with prior votes split on cuts and guidance. Markets see this as part of a broader shift toward a potentially lower US rate regime.
Warsh faces divided FOMC in June
"The US Treasury 10Y yield eased by 11 bps in the first four days of this week to 4.447%, down significantly from its 4.685% peak on May 19."
"US PCE inflation decelerated from 0.7% MoM in March to 0.4% in April, while Core PCE inflation slowed to 0.3% to 0.2%."
"In YoY terms, headline inflation rose to 3.8% from 3.5%, fuelling concerns among some Fed members that the 3.50-3.75% real Fed Funds Rate was below its neutral zone."
"However, Bessent expects US disinflation to return, driven by lower oil prices."
"But newly sworn-in Fed Chair Kevin Warsh will still face his first true test at managing a divided Fed at the June 16-17 FOMC."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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