Nzdusd drops amid improving New Zealand consumer confidence and mixed US economic data

NZDUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	-0.17%	-10 Pips
Week to-date	0.44%	25.9 Pips
November	-1.4%	-83.5 Pips

Upcoming key events (London Time)

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What happened lately

In New Zealand, the ANZ-Roy Morgan Consumer Confidence rose significantly in November to 99.8 points, up from 91.2 points in October. This increase indicates a more optimistic outlook among consumers, which can be associated with anticipated economic improvements or successful government policies. Conversely, the Reserve Bank of New Zealand’s decision to lower the official cash rate from 4.75% to 4.25% suggests a response to potential economic slowdowns, aimed at stimulating growth through increased borrowing and spending. Such a policy combines with rising consumer confidence to potentially revitalize the domestic economy, albeit with the risk of currency valuation adjustments.

In the United States, the Bureau of Economic Analysis reported mixed economic data. U.S. consumer spending rose by 0.4% in October, slightly less than the 0.5% increase in September, indicating modest retail activities. Meanwhile, the core PCE Price Index remained stable at 0.3%, highlighting steady inflation pressures when excluding volatile food and energy prices. A more comprehensive yearly view showed a minor increase to 2.8% from 2.7%, signaling moderate inflationary trends. Personal income saw a boost of 0.6%, doubling from the previous month’s rise, which could increase disposable income and demand. However, the Chicago Purchasing Managers’ Index fell to 40.2 in November, denoting slowing manufacturing activities, while pending home sales and durable goods orders presented mixed results.

For the U.S. dollar, the combination of mixed spending data, stable inflationary pressures, and slightly rising personal income presents a nuanced economic landscape. A decrease in pending home sales and manufacturing sectors could curb aggressive monetary policy moves by the Federal Reserve. Furthermore, a steady GDP growth at an annual rate of 2.8%, coupled with slight price index increases, complements the view of a stable, albeit modestly expansive, economy.

For NZDUSD, New Zealand’s interest rate cut could apply downward pressure on the New Zealand dollar against the U.S. dollar. While rising consumer confidence in New Zealand might provide local economic support, overall investor sentiment would tilt toward a stronger U.S. economy given the mixed, yet predominantly stable data coming from the United States. The slight drop of -0.17% in NZDUSD to 0.58880 reflects these dynamics, with further developments likely hinging on future economic announcements and data releases from both regions.

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What can we expect from NZDUSD today?

NZDUSD on Thursday dropped -0.17% to 0.58880. Price is above 9-Day EMA while Stochastic is rising.

Updated daily direction for NZDUSD looks bearish as the pair posted lower in Thursday trading session.

Looking ahead for the day, immediate support level is at S1 0.58768 with break below could see further selling pressure towards S2 at 0.58656. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 0.59050 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 0.58797 would indicate selling pressure.

For the week to-date, take note that NZDUSD is mixed as compared to the prior week.

Key levels to watch out:

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