Forex News
- NZD/USD is testing support at the 0.5930 area after rejection at 0.5967.
- Hot US inflation figures and concerns about the US-Iran deadlock are underpinning the US Dollar.
- The Kiwi depreciated after the release of the RBNZ's inflation expectations earlier on Wednesday.
The New Zealand Dollar (NZD) is showing the weakest performance of the G8 currencies on Wednesday, heading lower for the second consecutive day against a stronger US Dollar (USD), with NZD/USD bears testing the bottom of the weekly range at 0.5930 at the time of writing.
The US Dollar is drawing support from waning hopes of further Federal Reserve (Fed) rate cuts, following strong US Consumer Price Index (CPI) figures on Tuesday, and investors’ concerns about the stalemate in the US-Iran conflict. In New Zealand, the increase in the Reserve Bank of New Zealand’s (RBNZ) Inflation Expectations has failed to support the Kiwi.
Technical Analysis: Below 0.5930, the next target is the 0.5870 area
NZD/USD shows a slightly offered near-term tone on Wednesday. The 4-hour Relative Strength Index (RSI) has dropped below the 50 line with a negative Moving Average Convergence Divergence (MACD) histogram, reinforcing the view of a waning bullish momentum after the recent pullback.
Bears are testing support in the area between 0.5925 and 0.5935 (April 17 and May 4 highs and May 8 and 12 lows). If this area gives way, the next bearish target will be the May 5 intraday low, right above 0.5870. Further down, the April 29 low, at 0.5815.
On the topside, immediate resistance emerges at the 0.5970 area, which held bulls on May 8 and 11, ahead of the May 6 high at 0.5991.
(The technical analysis of this story was written with the help of an AI tool.)
New Zealand Dollar Price Today
The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the strongest against the Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.26% | 0.09% | 0.11% | 0.04% | 0.00% | 0.37% | 0.19% | |
| EUR | -0.26% | -0.18% | -0.15% | -0.22% | -0.27% | 0.09% | -0.10% | |
| GBP | -0.09% | 0.18% | 0.02% | -0.04% | -0.08% | 0.29% | 0.09% | |
| JPY | -0.11% | 0.15% | -0.02% | -0.07% | -0.11% | 0.22% | 0.09% | |
| CAD | -0.04% | 0.22% | 0.04% | 0.07% | -0.04% | 0.32% | 0.13% | |
| AUD | -0.00% | 0.27% | 0.08% | 0.11% | 0.04% | 0.37% | 0.19% | |
| NZD | -0.37% | -0.09% | -0.29% | -0.22% | -0.32% | -0.37% | -0.17% | |
| CHF | -0.19% | 0.10% | -0.09% | -0.09% | -0.13% | -0.19% | 0.17% |
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).
tone on
Rabobank’s Senior Macro Strategist Bas van Geffen notes that concerns over the Middle East and the closure of the Strait of Hormuz have pushed Oil prices higher, with Dated Brent moving above $111. He highlights that Iran’s control over energy flows and China’s diversification of Oil imports could prolong disruptions, keeping upward pressure on Oil in coming days.
Hormuz closure drives Brent higher
"Concerns about the Middle East continued to dictate markets yesterday. The Strait of Hormuz remains closed, and there were no signs that this will change soon. Oil prices rose further."
"Dated Brent jumped 5% on the day to top $111."
"Meanwhile, Iraq and Pakistan have reportedly made deals with Iran to safeguard oil and LNG shipments from the Gulf – underscoring that Iran is able to effectively control the flow of energy through the Strait of Hormuz."
"China has also further diversified its oil imports."
"This may make China more resilient to prolonged disruptions in Hormuz, while it also cuts off more potential income for Iran."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
The Eurozone industrial sector activity rises steadily by 0.2% in March, slower than 0.3% estimates, according to data published by Eurostat. February’s Industrial Production data was revised lower from 0.4%.
On an annualized basis, the industrial output declined at a faster pace of 2.1% against -1.7% expectations. In February, the Industrial Production contracted by 0.8%, revised lower from -0.6%.
Market reaction
There seems to be no immediAte impact of weak Eurozone Industrial Production data on the Euro (EUR). As of writing, EUR/USD trades 0.3% lower to near 1.1700 due to the upbeat US Dollar (USD).
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- Dow Jones futures flatten as traders adopt caution ahead of PPI inflation data.
- US futures are mixed as traders await PPI data to gauge how Iran war-related energy shocks are impacting US inflation.
- Hotter US CPI data triggered a sell-off in technology shares on Monday, pressuring market sentiment as rate-cut hopes faded.
Dow Jones futures move little around 49,850 during the European hours on Wednesday, ahead of the United States (US) regular opening. Meanwhile, the S&P 500 advance 0.24% to near 7,440, and the Nasdaq 100 futures rise 0.71% toward 29,400.
US stock futures perform mixed ahead of the upcoming Producer Price Index (PPI) data, which is expected to provide critical insight into how the economic ripple effects of the war in Iran are permeating the US landscape.
During Tuesday’s US regular session, the Dow Jones futures added 0.11%, while the S&P 500 and Nasdaq Composite declined 0.16% and 0.71%, respectively. Market Sentiment was pressured by weakness in technology shares following the release of hotter-than-expected US Consumer Price Index (CPI) data, which has reinforced a hawkish sentiment surrounding the Federal Reserve (Fed) monetary policy outlook.
The Bureau of Labor Statistics reported on Tuesday that April CPI rose 0.6% month-over-month, pushing the annual inflation rate to 3.8%, its highest level since May 2023. Core CPI, which strips out volatile food and energy costs, also trended upward with a 2.8% annual rise.
Moreover, the potential for a prolonged closure of the Strait of Hormuz threatens to keep oil prices elevated, fueling inflationary fears. Such a scenario increases the likelihood of "higher-for-longer" Fed rates, dampening market sentiment.
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
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