Thursday's decline from a peak of more than a week ago has given the NZD/USD some upward momentum again.
The Kiwi gains from a positive risk tone, although spot prices are kept in check by a little increase in the USD.
It is advisable to use care while positioning for future gains due to the mixed underlying backdrop.
After strong two-way price fluctuations the day before, the NZD/USD pair draws in new buyers and maintains its position above the 0.5800 mark during Friday's Asian session. However, spot prices are still below a one-week high, and on Thursday, the 200-day Simple Moving Average (SMA) hit.
One of the main factors acting as a headwind for the NZD/USD pair is the US Dollar (USD), which is trying to build on the day before's positive recovery from a one-week low. Additionally, traders may be discouraged from making extreme bullish bets on the New Zealand Dollar (NZD) due to growing predictions for additional interest rate reduction by the Reserve Bank of New Zealand (RBNZ). Prior to setting up for a continuation of the pair's recovery move from the area of the mid-0.5700s, or its lowest level since April reached last week, this in turn calls for some prudence.
Meanwhile, given the increasing consensus that the US Federal Reserve (Fed) would cut borrowing prices twice more before the end of this year, any significant USD appreciation appears difficult. Also, concerns that a protracted US government shutdown would negatively impact economic performance could cap the USD and provide some support for the NZD/USD exchange rate. With possible blows to GDP, growth, and the labor market, US Treasury Secretary Scott Bessent said that the shutdown might have a more severe impact on the economy than previous ones.
The Kiwi gains from a positive risk tone, although spot prices are kept in check by a little increase in the USD.
It is advisable to use care while positioning for future gains due to the mixed underlying backdrop.
After strong two-way price fluctuations the day before, the NZD/USD pair draws in new buyers and maintains its position above the 0.5800 mark during Friday's Asian session. However, spot prices are still below a one-week high, and on Thursday, the 200-day Simple Moving Average (SMA) hit.
One of the main factors acting as a headwind for the NZD/USD pair is the US Dollar (USD), which is trying to build on the day before's positive recovery from a one-week low. Additionally, traders may be discouraged from making extreme bullish bets on the New Zealand Dollar (NZD) due to growing predictions for additional interest rate reduction by the Reserve Bank of New Zealand (RBNZ). Prior to setting up for a continuation of the pair's recovery move from the area of the mid-0.5700s, or its lowest level since April reached last week, this in turn calls for some prudence.
Meanwhile, given the increasing consensus that the US Federal Reserve (Fed) would cut borrowing prices twice more before the end of this year, any significant USD appreciation appears difficult. Also, concerns that a protracted US government shutdown would negatively impact economic performance could cap the USD and provide some support for the NZD/USD exchange rate. With possible blows to GDP, growth, and the labor market, US Treasury Secretary Scott Bessent said that the shutdown might have a more severe impact on the economy than previous ones.
