NZD Rebounds as USD Weakness Boosts Kiwi
The New Zealand Dollar (NZD) rebounded on Thursday after its decision-day slide on Wednesday, when the Reserve Bank of New Zealand (RBNZ) lifted the Official Cash Rate (OCR) to 2.75%. The NZD/USD pair traded just under 0.5900, reclaiming both the 200-day and 50-day Exponential Moving Average (EMA), which sit near 0.5850.
The RBNZ's statement highlighted inflation risks to the upside, with four of its seven committee members seeing upside risks, while two called the risks balanced. This split in views led to a market sell-off on Wednesday, but the NZD recovered on Thursday, driven by a weaker US Dollar (USD) due to a Fed governor's comments on interest rates.
Thursday's payrolls report and China's trade data next week will be crucial for the Kiwi. A soft payrolls print could boost the NZD, while a firm one would restore the September hike and hand back Thursday's gain. Additionally, New Zealand's third-quarter inflation print in mid-October and second-quarter growth figure due before it will influence the RBNZ's path.