NZD/USD holds just beneath 0.5950 on Thursday, unchanged on the session across a range of twenty-two pips and some forty-five pips under the window high just short of 0.6000 set in early June.
The pair sits close to ninety pips above a rising 50-day Exponential Moving Average (EMA) near 0.5850, with the 200-day a shade beneath that, and the daily Stochastic Relative Strength Index (Stoch RSI) near 65 with room above it
The currency did the job the hike was for The Reserve Bank of New Zealand raised the Official Cash Rate a quarter point to 2.50% on July 8, its first increase since 2023, and gave two reasons for it. The first was that 2.25% sat somewhat beneath neutral, so the move removed stimulus rather than applied restraint. The second was that standing still risked letting financial conditions loosen further, named explicitly as a softer currency or lower rate expectations.
The Kiwi has since climbed close to 5.7% from its early-July low just above 0.5600 and now trades within touching distance of its high for the window. A currency that strong tightens financial conditions without help, which retires the second of those two reasons before the September meeting arrives. Wednesday’s consensus 2.75% would in any case leave the rate inside the Reserve Bank’s own 2.50% to 3.50% neutral uncertainty band, so a second increase buys less accommodation rather than actual restraint.