NZ dollar flat, China tensions worsen

NZD/USD is directionless on Thursday. In the European session, NZD/USD is trading at 0.7212, down 0.03% on the day.

China is in the spotlight, as relations with Australia and New Zealand seem to be souring by the day. New Zealand Prime Minister Jacinda Ardern had some stern comments about China this week, saying that the differences between the two countries had become more difficult. New Zealand criticized China for its treatment of the Uyghurs minority, but stopped short of accusing China of genocide, a move which would have likely caused a harsh reaction from Beijing.

China has ratcheted up the silent trade war with Australia, and this has New Zealand very worried as China is New Zealand’s largest trading partner. Prime Minister Arden is likely to tread very carefully with China and ensure that any ruffled feathers in Beijing do not jeopardize the trading relationship between the two countries. Jitters over China sent the Australian briefly lower earlier on Thursday, and the Aussie dragged down the New Zealand dollar for a brief time as well. This highlights the close linkage between the movement of the two currencies.

On Wednesday, RBNZ Deputy Governor Geoff Bascand noted his concern that a decline in house prices could affect the financial system. Bascand warned that the central bank was prepared to further tighten lending conditions for housing using LVR requirements or additional tools that we are assessing” as the RBNZ attempts to discourage speculators from further heating up the housing market.

In economic news, the ANZ Business Confidence Index for May jumped to 7.0, up sharply from the previous reading of -2 points. An improving economy has resulted in stronger demand, but factories have been unable to keep pace. The inevitable result will be an increase in inflation, which the RBNZ will be closely monitoring, as it will have to consider a taper of QE if inflation moves substantially higher.


NZD/USD Technical


With NZD/USD range trading, there is no change in the support or resistance levels:

  • NZD/USD has support at 0.7113 and 0.7064
  • There is resistance at 0.7249 and 0.7336

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at Visit to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Kenny Fisher

Kenny Fisher

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