The New Zealand Dollar remains elevated against the USD after the Fed’s dovish stance, though Chinese PMI data tempers gains.
The New Zealand Dollar (NZD) steadies near 0.5885 against the US Dollar (USD) on Friday, holding just below eight-week highs. Downside attempts have been limited above 0.5860, a former resistance level, as the Kiwi extends a 1.5% weekly rally driven by USD weakness following the Federal Reserve’s policy meeting.
The Fed left interest rates unchanged at 3.50%-3.75%, as expected, but markets interpreted Chair Jerome Powell’s lack of forward guidance as dovish, pressuring the USD. However, Friday’s decline in the NZD follows weaker-than-expected Chinese manufacturing PMI data, signaling contraction in July due to weak demand and typhoon disruptions. China’s economic health remains a key driver for the NZD.
Technical indicators suggest the pair is overbought, with the RSI above 70, though the MACD still signals underlying bullish momentum. A break below 0.5860 could trigger a deeper correction, though the broader trend remains constructive.