New Zealand dollar steadies

The New Zealand dollar has stabilized on Friday but is in negative territory for a fifth straight day. NZD/USD is currently trading at 0.6824, down 0.04% on the day.

What’s next for RBNZ? 

It was quite the week for the RBNZ, which can take much of the responsibility for the New Zealand dollar tanking over 3% this week against the greenback. The RBNZ was widely expected to raise interest rates from 0.25% to 0.50% at its policy meeting, but an outbreak of Covid in New Zealand triggered a lockdown across the country. The central bank decided that this was not the time to hike rates, which would have made it the first major central bank to raise rates since the Covid pandemic hit in early 2020. The abrupt backtrack sent the New Zealand dollar sharply lower, and the currency has plunged 3.05% this week.

The RBNZ statement noted that the Bank was set on raising rates before the end of the year, with rates expected to rise above 2% in 2022. However, this message was not enough to help the kiwi withstand the US dollar torrent, which has flung the major currencies on their backside this week.

The US dollar received a double-edged boost this week, as risk appetite eroded and the FOMC minutes were hawkish.

Risk sentiment has slipped due to surging infections rates of the delta variant of Covid. The global recovery now seems less certain, and nervous investors have flocked to the safe-haven US dollar, which has recorded strong gains this week. The US dollar has done particularly well against minor currencies such as the New Zealand, Australian and Canadian dollars, gaining more than 3% against each one this week.

The dollar was also boosted by the FOMC minutes, as the markets judged the Fed minutes to be hawkish, despite the lack of a timeframe for a tapering. With most members on board for a taper on either side of December, it’s clear that a taper is now a question of if, not when. The minutes stressed that there was no mechanical link between tapering and rate hikes, but I would expect the dollar to receive a boost once a taper is announced. Even without a clear answer as to when the Fed will raise rates, the outlook for the US dollar is positive.


NZD/USD Technical



  • There is resistance at 0.6985. This is followed closely by resistance at 0.6930
  • On the downside, there are support lines at 0.6763 and 0.6646. Both are monthly support lines.

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Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.