Nzdusd consolidates as New Zealand’s economic slowdown contrasts with mixed U.S. data

NZDUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	0.06%	3.4 Pips
Week to-date	-0.1%	-6.2 Pips
May	0.75%	44.4 Pips

Upcoming key events (London Time)

Fri 01:30 PM USD PCE Price Index, excluding food and energy (12-mth)

What happened lately

In New Zealand, economic indicators for April and May 2025 show a contraction in building consents and a decrease in consumer confidence, reflecting a slowdown in economic activity. Building consents for new dwellings fell sharply by 15.6% in April, significantly reversing the positive trend seen in March. This decline suggests caution in the construction sector, possibly due to financial uncertainties or reduced demand. Simultaneously, consumer confidence dropped to 92.9 points in May from 98.3 points in April, indicating that consumer sentiment is deteriorating, possibly due to concerns over economic conditions or spending power. Additionally, the Reserve Bank of New Zealand (RBNZ) lowered its Official Cash Rate to 3.25%, down from 3.5%, which could be a measure to stimulate economic activity and boost confidence.

In the United States, the economic data for the same period showed mixed results. U.S. Pending Home Sales fell by 6.3% in April, a reversal from the rise seen in March, indicating a possibly cooling housing market. There was an increase in Initial Unemployment Claims to 240,000 in the week ending May 24, signaling potential challenges in the labor market. However, the GDP annual rate for Q1 2025 showed a slight improvement to -0.2%, and the PCE excluding food and energy prices showed a minor drop to 3.4% in Q1. The GDP Price Index and the PCE Price (3-month) remained unchanged, suggesting stable inflationary pressures. These factors indicate some stabilization, yet ongoing challenges in economic growth and employment.

The continued slowdown in New Zealand’s housing and consumer confidence, combined with a reduction in interest rates, suggests that the country’s economy is losing momentum. This is likely to weaken the New Zealand dollar (NZD) as investors may perceive increasing risks and reduced returns. Conversely, the mixed economic signals from the U.S., with some data indicating resilience, could provide relative support to the U.S. dollar. As a result, the NZDUSD currency pair could face downward pressure, especially if the U.S. economic indicators, like the upcoming release of the USD PCE Price Index excluding food and energy, signal stronger economic performance. This divergence in economic trajectories might maintain or widen the gap between the two currencies, influencing trading behaviors towards favoring the USD over the NZD.

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What can we expect from NZDUSD today?

NZDUSD on Thursday rose 0.06% to 0.59687. Price is above 9-Day EMA while Stochastic is rising.

Updated daily direction for NZDUSD looks mixed as the pair is likely to consolidate above 0.59316 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 0.59920 or trades above daily pivot 0.59618. Break above could target R1 at 0.59989. While to the downside, we are looking at 0.59316 (S1) and daily low of 0.59247 as support levels. NZDUSD need to break on either side to indicate a short-term bias. A break above 0.59920 may suggest continuation after recent positive movement.

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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