Nzdusd drops as us inflation rates stabilize

NZDUSD Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	-0.62%	-36.6 Pips
Week to-date	-0.17%	-10 Pips
May	-0.63%	-37.6 Pips

Upcoming key events (London Time)

Thu 01:30 PM USD PPI excluding Food and Energy sectors (12-mth)
Thu 01:30 PM USD Monthly Retail Trade (1-mth)
Thu 01:40 PM USD Federal Reserve Chair Jerome Powell speech
Fri 04:00 AM NZD RBNZ Survey of Inflation Expectations (3-mth)

What happened lately

In the United States, the Consumer Price Index (CPI) Inflation Rate for the 12-month period ending in April 2025 marginally decreased to 2.3% from the previous 2.4% recorded in March 2025, according to the Bureau of Labor Statistics. This indicates a slight deceleration in the rate of inflation over the year. On a monthly basis, however, U.S. CPI Inflation saw a rise of 0.2% in April 2025, reversing the previous month’s decline of -0.1%. This suggests that prices rose in April on a short-term basis. Excluding the volatile food and energy sectors, the core CPI inflation rate increased slightly to 0.2% in April from 0.1% in March. Meanwhile, on a 12-month basis, the rate remained steady at 2.8% in April compared to March 2025, indicating stability in core inflation over the year.

These economic indicators have implications for the NZDUSD currency pair. The recent drop of 0.62% in the NZDUSD rate to 0.58971 suggests a weakening of the New Zealand Dollar against the U.S. Dollar. The modest reduction in annual U.S. inflation and the monthly rise might enhance the perception of a stable U.S. economy, thereby supporting the U.S. Dollar. Additionally, the stability in core inflation could lead to expectations of steady Federal Reserve monetary policies, which might further support the U.S. Dollar. Upcoming high-impact events, including the Producer Price Index (PPI) and retail sales data, along with a speech from Federal Reserve Chair Jerome Powell, could add to market volatility and influence the NZDUSD exchange rate. Any hawkish signals from these data points or statements could bolster the U.S. Dollar. Conversely, the RBNZ Survey of Inflation Expectations for New Zealand may also provide cues regarding monetary policy stance and impact the NZDUSD. If expected inflation remains high, it could provide some support to the New Zealand Dollar and potentially alter the current trend in the currency pair.

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What can we expect from NZDUSD today?

NZDUSD on Wednesday dropped -0.62% to 0.58971. Price is below 9-Day EMA while Stochastic is rising.

Updated daily direction for NZDUSD looks mixed as the pair is likely to consolidate above 0.58655 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 0.59688 or trades above daily pivot 0.59172. Break above could target R1 at 0.59487. While to the downside, we are looking at 0.58655 (S1) and daily low of 0.58856 as support levels. NZDUSD need to break on either side to indicate a short-term bias. A close below 0.58856 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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