Nzdusd drops amid mixed US inflation data and fiscal concerns

NZDUSD Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	-0.39%	-23.5 Pips
Week to-date	0.32%	19 Pips
June	1.24%	74 Pips

Upcoming key events (London Time)

Thu 01:30 PM USD PPI excluding Food and Energy sectors (12-mth)
Fri 03:00 PM USD Index of Consumer Sentiment

What happened lately

In the United States, the Monthly Treasury Budget Statement recorded a significant decline from a surplus of $258 in April 2025 to a deficit of -$316 in May, indicating increased governmental expenditure or reduced income. During the same period, the Consumer Price Index (CPI) inflation rate rose slightly to 2.4% from 2.3%, suggesting a moderate pick-up in general price levels, although core inflation (excluding food and energy) remained steady at 2.8%. However, on a month-over-month basis, core inflation experienced a decrease to 0.1% from 0.2%, while the overall CPI inflation rate likewise dipped to 0.1%. These figures point to a mixed inflationary environment, with some pressure easing while the annual rate suggests modestly increasing prices.

The recent developments could substantially impact the NZDUSD currency pair. A dip in the U.S. Treasury Budget, coupled with slight increases in annual CPI figures, may lead to market expectations of potential fiscal policy adjustments or monetary tightening by Federal Reserve policymakers. Given this fiscal deficit and inflationary context, USD may experience fluctuations as markets anticipate future policy directions, possibly strengthening if the Federal Reserve hints at interest rate hikes to counter inflation, or conversely weakening with stimulus measures to address the budget shortfall. As the NZDUSD was observed to decrease by 0.39% to 0.60270, these economic signals likely spurred some cautious trading behavior regarding USD’s potential strengthening against NZD. Upcoming data releases on the U.S. Producer Price Index and Consumer Sentiment will be key in determining the near-term trajectory of USD, influencing the NZDUSD pairing accordingly based on perceived economic health and confidence. The anticipated data outcomes may either bolster the recovery of the USD or lead to further depreciation should negative sentiment persist. Hence, traders may remain vigilant of these indicators along with the strategic policy responses they might evoke.

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What can we expect from NZDUSD today?

NZDUSD on Wednesday dropped -0.39% to 0.60270. Price is above 9-Day EMA while Stochastic is falling.

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

Looking ahead for the day, immediate support level is at S1 0.60113 with break below could see further selling pressure towards S2 at 0.59955. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 0.60658 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 0.60228 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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