The currency pair remains under slight pressure ahead of key US-China talks, with Fed rate hike bets rising on inflation concerns.
The NZD/USD pair dipped to 0.5935 in late Asian trading, reflecting cautious market sentiment as investors await the outcome of the Trump-Xi meeting. The US Dollar Index (DXY) held firm near 98.50, close to its weekly high, while Asian stocks declined, with the Nikkei 225 down 0.3% to 63,070.
New Zealand’s currency is sensitive to US-China trade developments due to its trade ties with China. Rising US inflation, driven by energy prices, has increased expectations for a Federal Reserve rate hike, with CME FedWatch tool odds at 32.2%, up from near zero a month ago.
Technically, NZD/USD remains above its 20-day EMA at 0.5909 and the 50% Fibonacci retracement at 0.5890, with an RSI of 55 indicating modest bullish momentum.