1. Home
  2. /News
  3. /NZDUSD Falls to 1-Year Low Despite Jump in New Zealand Inflation PPI

NZDUSD Falls to 1-Year Low Despite Jump in New Zealand Inflation PPI

Skerdian Meta•Monday, November 18, 2024•2 min read

NZDUSD has lost more than 5 cents, piercing below this year’s low last week and opening the door for further declines to the 2023 low, as inflation falls in New Zealand.

The New Zealand Q3 PPI Inflation Report

NZD/USD pair has been fluctuating within a five-cent range throughout 2024, with 0.8550 acting as a key support level. Following a failed attempt to sustain levels above 0.60 last month, the pair dropped to 0.8550, briefly dipping to 0.8534 before closing the week above support. The outlook turned bearish after the pair was unable to break past the upper resistance at 0.6370 in September.

The demand for the USD has significantly weakened since Trump’s win in the U.S. presidential election. A temporary rebound for the NZD/USD followed a successful Chinese stimulus program, but optimism waned as China’s underwhelming economic measures weighed on market sentiment. This added pressure on risk-sensitive currencies like the New Zealand dollar. For sellers to maintain momentum, the pair must decisively breach the 0.5850 support level, a move anticipated this week. A break below could pave the way toward 0.5770, the 2023 low.

NZD/USD Chart Daily – Testing the Support LevelChart NZDUSD, D1, 2024.11.17 22:53 UTC, MetaQuotes Ltd., MetaTrader 5, Demo

Confidence among NZD buyers remains muted due to the Reserve Bank of New Zealand’s (RBNZ) shift to a dovish stance, coupled with weak economic data from both New Zealand and China. The RBNZ’s latest report showed a decline in 1-Year Inflation Expectations from 2.4% to 2.05%, signaling easing short-term inflation pressures. Additionally, the Q3 jobs report revealed an increase in the unemployment rate from 4.6% to 4.8%, reinforcing the RBNZ’s cautious approach.

New Zealand PPI Inflation Report for Q3

  • New Zealand Q3 PPI Output +1.5% vs 0.9% expected
  • Q2 PPI Output was 1.1%
  • Q3 PPI Inputs +1.9% vs 1.0% expected
  • Q2 PPI Input was 1.4%

New Zealand BusinessNZ Services Index

  • Services PMI (October) 46.0 points
  • September Services PMI was 45.7 points
  • The index remains in contraction territory (below 50) and significantly below the long-term average of 53.1 points.
The higher-than-expected Q3 PPI figures suggest rising inflationary pressures within New Zealand’s production pipeline, potentially complicating the Reserve Bank of New Zealand’s policy outlook. Meanwhile, the services sector remains weak, with the PMI stuck in contraction and far below historical averages, signaling persistent headwinds for broader economic recovery.

NZD/USD Live Chart

NZD/USD
Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
ABOUT THE AUTHOR See More
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
Related Articles
Comments
0 0 votes
Article Rating
Subscribe
Notify of
0 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments

Add 3442

Add 3440

XM

Best Forex Brokers