The NZD/USD continued its decline on Friday, trading at around 0.5820 at the time of writing and down 0.58% on the day. The pair records its fourth straight daily loss as the US dollar (USD) strengthens amid rising geopolitical tensions and renewed inflation concerns.
The US dollar remains supported as investors reassess the outlook for US monetary policy. The US Dollar Index (DXY), which tracks the US dollar against a basket of six major currencies, is above 100, closing at its highest level since November. Higher U.S. Treasury yields also make the U.S. currency more attractive.
The recent rise in oil prices is fueling fears of continued inflationary pressures. Markets now believe that the Federal Reserve (Fed) may delay the start of its interest rate easing cycle as expectations for interest rate cuts have been significantly lowered in recent days. This environment continues to support the US dollar and influence risk-sensitive currencies such as the New Zealand dollar (NZD).
Iran’s modern Supreme Leader Mojtaba Khamenei has indicated that closing the Strait of Hormuz may remain part of the country’s strategy to put pressure on its opponents, which will further raise uncertainty in energy markets. Although the International Energy Agency (IEA) announced the release of 400 million barrels from strategic reserves to lend a hand stabilize supplies, oil prices remain highly volatile.
In a risk-averse environment, Kiwis remain under pressure. Investors are taking a more cautious stance as escalating geopolitical tensions and rising global inflation risks continue to weigh on cyclical currencies.
Markets are now turning their attention to Friday’s busy U.S. economic calendar, which includes the Personal Consumer Expenditures (PCE) price index, gross domestic product (GDP) data, robust goods orders and the University of Michigan Consumer Sentiment Index. These releases may provide further clues about the trajectory of US monetary policy and influence near-term movements of the NZD/USD pair.
According to BBH analysts, the strength of the US dollar is largely due to threats to shipping through the Strait of Hormuz and a piercing raise in oil prices. They note that as long as the strait remains effectively disrupted, demand for U.S. dollar financing could keep the dollar near cyclical highs.
Today’s price of the New Zealand dollar
The table below shows the current percentage change of the New Zealand Dollar (NZD) against the major listed currencies. The New Zealand dollar was strongest against the British pound.
| USD | EUR | GBP | JPY | BOOR | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.44% | 0.58% | 0.06% | 0.21% | 0.49% | 0.56% | 0.23% | |
| EUR | -0.44% | 0.13% | -0.37% | -0.23% | 0.05% | 0.11% | -0.22% | |
| GBP | -0.58% | -0.13% | -0.51% | -0.36% | -0.08% | -0.03% | -0.35% | |
| JPY | -0.06% | 0.37% | 0.51% | 0.16% | 0.43% | 0.48% | 0.17% | |
| BOOR | -0.21% | 0.23% | 0.36% | -0.16% | 0.27% | 0.32% | 0.02% | |
| AUD | -0.49% | -0.05% | 0.08% | -0.43% | -0.27% | 0.05% | -0.26% | |
| NZD | -0.56% | -0.11% | 0.03% | -0.48% | -0.32% | -0.05% | -0.32% | |
| CHF | -0.23% | 0.22% | 0.35% | -0.17% | -0.02% | 0.26% | 0.32% |
The heat map shows the percentage changes of the major currencies relative to each other. The base currency is selected from the left column and the quote currency from the top row. For example, if you select 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).
