NZD Steady as Weak US Durable Goods Data Fuels Fed Rate Cut Bets

The New Zealand Dollar maintained its stability against the US Dollar despite weak durable goods orders data in the US. The data, released on February 25, showed a 1.1% decline in January, exceeding economists' forecasts of a 0.5% drop.

This marks the second consecutive monthly decline, raising concerns about the health of the US manufacturing sector. Core capital goods orders, a closely watched proxy for business investment, also missed expectations, slipping 0.3%. The data adds to a growing narrative that the US economy is losing momentum under elevated interest rates and lingering inflation pressures.

The immediate market reaction was a weakening US Dollar against a basket of major currencies. The CME FedWatch Tool now shows a 65% probability of a rate cut at the Fed's May meeting, up from 55% a week ago. A weaker Dollar typically provides support for commodity-linked currencies like the New Zealand Dollar.