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NZ dollar trades near 0.5675 as investors await Trump-Xi meeting
NZD/USD was just above its early-July low after a prior dollar push, while rising Fed hike expectations and oil-linked inflation fears supported the US dollar.
The New Zealand dollar held steady around 0.5675 versus the US dollar, trading just above its lowest level since early July, as investors awaited an upcoming meeting between US President Donald Trump and China leader Xi Jinping, according to FXStreet.
FXStreet said the US dollar paused after its previous day rally, but remained supported by expectations for further Federal Reserve tightening and by ongoing geopolitical uncertainty. The outlet also pointed to a dovish outlook from the Reserve Bank of New Zealand, which could limit any recovery in NZD/USD before October.
Investors have priced in about a 70% chance of another Fed rate increase in October after a private survey indicated US business activity accelerated for a fourth consecutive month. FXStreet cited S&P Global flash data showing the Composite PMI Output Index rising from 56.0 to 58.4 in September, the highest level since July 2021.
The report added that an oil price rally has reignited inflation concerns, while renewed US-Iran tensions have kept a geopolitical risk premium in play, factors that can benefit the safe-haven dollar and weigh on NZD/USD. FXStreet also noted the pair’s near-term bearish bias after a breakdown below 0.5700, with potential downside toward prior lows near 0.5625.