Kiwi Slips Back Toward 0.5690 as a Divided Rate Panel and Falling Commodity Prices Sap Its Momentum The New Zealand Dollar handed back two days of gains to trade near 0.5690 after commodity prices fell 1.0% in June and the rate-advisory shadow board split evenly ahead of July's policy call, while the US Dollar held firm. After two straight sessions of gains, the New Zealand Dollar turned lower again in Monday's Asian trading, sliding back toward 0.5690 against the US Dollar. Two forces weighed on the currency widely known as the Kiwi: a softer commodity backdrop on one side and, on the other, deep disagreement inside the policy-advisory panel just days before next week's central bank meeting, a combination that left traders reluctant to commit strongly in either direction. The commodity slide that set the tone The most direct trigger for the Kiwi's weakness was a drop in commodity prices. The ANZ World Commodity Price Index fell 1.0% in June, with easing Middle East tensions and lower oil prices doing much of the damage. Because commodity exports are the backbone of New Zealand's economy, a fall in global prices for those goods feeds straight through to the country's export income, and that pressure quickly reaches the currency itself. ANZ's case for a July rate hike In line with this hawkish medium-term trajectory, ANZ anticipates that the Reserve Bank of New Zealand (RBNZ) will raise the Official Cash Rate (OCR) by 25 basis points to 2.50% next Wednesday. Notably, despite the sharp decline in global oil prices, ANZ maintains that persistent inflation risks and a weakened domestic currency warrant immediate action. Their argument is that delivering a neutral-to-dovish rate hike gives the RBNZ the most comfortable tactical footing to navigate current economic pressures without overly roiling the markets. A shadow board that cannot agree Another major source of volatility for the New Zealand Dollar is the uncertainty around policy itself. The NZIER shadow board, which advises on the interest rate call, is currently split evenly down the middle. So finely balanced a view right before the July policy decision creates deep uncertainty, because the market is getting no clean signal about which way the central bank will lean. That very uncertainty is amplifying the swings in the Kiwi. The US Dollar keeps the upper hand On the other side of the pair, the US Dollar continues to advance as markets keep pricing in multiple Fed rate hikes this year. The CME FedWatch tool shows financial markets are pricing in a 77.3% chance of interest rate hikes by year-end. Investors are now looking ahead to Wednesday's release of the Fed's June policy meeting minutes to gain clearer insight into the future path of interest rates. Where the pair stands on the charts Live market data shows NZD/USD changing hands near 0.5690, just 0.05% below the previous close of 0.5693. Its 52-week range runs from 0.5584 to 0.6093. On the technical side, the 14-day RSI sits at 38, pointing to a bearish tilt while still holding above oversold territory. Price is trading below its key moving averages, with the EMA20 at 0.5729, the EMA50 at 0.5794 and the EMA200 at 0.5839, and the EMA50 sitting under the EMA200 confirms a long-term downtrend, a so-called death cross. Immediate support is seen near 0.5628 with resistance around 0.5864, while the daily pivot lies at 0.5699. Technically, a rebound back above 0.5700 would put bears on guard around the 0.5750 area. What really moves the New Zealand Dollar The Kiwi, a well-known traded currency among investors, is broadly driven by the health of New Zealand's economy and the country's central bank policy. Yet some particular factors move it too. The performance of the Chinese economy tends to sway the Kiwi because China is New Zealand's biggest trading partner. Bad news for the Chinese economy usually means fewer New Zealand exports to that country, hitting the economy and, in turn, the currency. Another mover is dairy prices, since the dairy industry is New Zealand's main export. High dairy prices lift export income, feeding positively into the economy and thus the NZD. The RBNZ's inflation mandate and rate differentials The Reserve Bank of New Zealand aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus on keeping it near the 2% mid-point. To do that, the bank sets an appropriate level of interest rates. When inflation runs too high, the RBNZ raises rates to cool the economy, but that move also pushes bond yields higher, increasing the appeal of investing in the country and thus boosting the NZD. Conversely, lower interest rates tend to weaken it. The so-called rate differential, or how New Zealand's rates stand or are expected to stand against those set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair. Domestic data and the risk mood Macroeconomic data releases in New Zealand are key to gauging the state of the economy and can shift the New Zealand Dollar's valuation. A strong economy built on high growth, low unemployment and solid confidence is good for the NZD. High growth attracts foreign investment and may encourage the central bank to raise rates if that strength arrives alongside elevated inflation. Conversely, weak data tends to send the NZD lower. The Kiwi also strengthens during risk-on periods, when investors see broad market risks as low and feel optimistic about growth, which brightens the outlook for commodities and commodity currencies like it. In times of market turbulence or economic uncertainty, however, it weakens, as investors sell higher-risk assets and flee to more stable safe havens. How the other majors are trading The other major pairs looked equally hesitant on Monday. GBP/USD struggled to build on last week's strong move higher and oscillated in a narrow band around the 1.3350 area during the Asian session. Spot prices remain below the technically significant 200-day Simple Moving Average, so caution is warranted before betting on an extension of the recent recovery from the 1.3140 zone, the year-to-date low touched in June. EUR/USD kicked off the new week on a subdued note and drifted in a tight range below mid-1.1400s, though it stayed within striking distance of a nearly two-week high touched last Thursday. Gold, meanwhile, struggled to hold its strength beyond $4,200 and edged back from a two-week high touched in the Asian session. The US Dollar softened slightly amid geopolitical uncertainty stemming from tensions in the Strait of Hormuz, a headwind for the metal, though receding Fed-hike bets may limit its downside. The catalysts that will shape the week The Dollar did drop on the non-farm payrolls print, yet a rate hike is still expected by year-end. The greenback's next catalysts are the ISM services PMI and the Fed minutes. On the New Zealand side, the RBNZ is expected to raise rates, and the focus will fall on its forward guidance. Rounding out the agenda are the ECB minutes, China's CPI and Canada's jobs report. Earlier, financial markets gathered at Sintra hunting for clues about the Fed's next move, only to leave largely with confirmation that Fed Chair Kevin Warsh intends to make those clues much harder to find. What this means for you • For forex traders: NZD/USD slipping near 0.5690 with resistance at 0.5750 on any move above 0.5700 signals the Kiwi's bounce is not yet durable, so manage risk carefully. • For investors and importers: A possible 25 basis point RBNZ hike and the Fed minutes could drive sharp swings in the pair this week, changing the cost of New Zealand-linked transactions. Questions & Answers 1. Why is the New Zealand Dollar falling? A 1.0% drop in June's commodity price index and uncertainty from an evenly split rate-advisory board have weakened the Kiwi. 2. What is ANZ expecting from the RBNZ? ANZ anticipates the RBNZ will raise the OCR by 25 basis points to 2.50% next Wednesday. 3. What does the 77.3% figure refer to? It is the CME FedWatch tool's probability of Fed interest rate hikes by year-end. 4. Where is NZD/USD trading now? The pair is around 0.5690, just below the previous close of 0.5693. 5. Why did the commodity index fall? Easing Middle East tensions and lower oil prices were the main drivers. 6. What data will traders watch this week? The Fed's June meeting minutes on Wednesday, plus the ISM services PMI, ECB minutes, China's CPI and Canada's jobs report. https://trendkia.com/en/market/kamoditi-kimaton-men-giravata-aura-bnte-hue-byaja-dara-borda-ne-new-zealand-dolara-ki-raphtara-roki-5097 TrendKia — Har trend, sabse pehle.