NZD/USD PRICE FORECAST: RECOVERY STALLS NEAR 20-DAY EMA
- NZD/USD corrects to near 0.6000 as the US Dollar bounces back.
- Trump’s protectionist policies would keep the US Dollar’s downside limited.
- The RBNZ is expected to cut interest rates again by 50 bps.
The NZD/USD pair struggles to extend Thursday’s recovery move above 0.6050 and corrects to near the psychological support of 0.6000 in Friday’s European session. The Kiwi pair faces slight pressure as the US Dollar (USD) rebounds after a sharp correction on Thursday. The US Dollar Index (DXY), which gauges Greenback’s value against six major currencies, bounces back from 104.20.
The USD gains as market participants expect that US Donald Trump’s tight external policies would improve the overall productivity, business investment, and spending for the longer term. Trump promised to raise import tariffs by 10% universally, except China, which is expected to face even higher duties.
Meanwhile, the outlook of the New Zealand Dollar (NZD) remains weak as poor labor demand has solidified speculation of another Reserve Bank of New Zealand (RBNZ) larger interest rate cut in its policy meeting on November 27.
New Zealand Q3 employment data showed that the laborforce reduced by 0.5%, faster than estimates of a 0.4% decline. The Unemployment Rate rose to 4.8%, slower than estimates of 5% but was higher than 4.6% in the second quarter of this year.
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