NZD/USD Tussle Continues at Key Support Level

The New Zealand dollar has been the weakest major currency in September, falling almost 3% as geopolitical uncertainty and dovish monetary policy weighed on its value.

The Reserve Bank of New Zealand raised its Official Cash Rate by 25 basis points to 2.75%, but projected a more gradual path for further tightening than markets had expected, reducing the impact of the rate hike.

NZD/USD is down over 4% this month as the US dollar benefits from a hawkish Federal Reserve and rising Treasury yields, making it harder for the New Zealand dollar to recover.

The currency has found some support around 0.5660, but sellers have struggled to break below this level, with buyers determined to defend it.