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NZD/USD falls toward its late-April range floor as US yields rise

NZD/USD trades just under 0.5700, while two-year US Treasury yields climbed to about 4.9% after strong US business surveys.

Reported · Written up by our desk · Major Pairs

The New Zealand dollar is sliding against the US dollar, returning toward the lower end of its range since April. NZD/USD is trading just under 0.5700, at the weakest level since early July and close to the approximate 0.5600 range floor.

FXStreet notes the move is tied to higher US rate expectations, with two-year US government bond yields rising to about 4.9% following strong US business surveys. That shift is occurring as traders look to central bank decisions on October 28, the day both the Reserve Bank of New Zealand and the Federal Reserve meet.

In New Zealand, the RBNZ has already lifted its Official Cash Rate twice since July 8, reaching 2.75% on September 2. Its published forecast points to no change at its October 28 decision and a rise to 3.00% in December, while RBNZ Governor Breman cautioned near term inflation could run above forecast if crude oil stays expensive.

The outlook also intersects with China and the US, as China is New Zealand’s largest export market and Chinese President Xi is set to meet President Trump at the White House on Thursday. FXStreet adds that technical levels cited in its note include support just above 0.5650 and the late-June low just over 0.5600, warning that a daily close below 0.5600 would signal the range has broken.

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