NZD/USD steadies as mixed CPI data is overshadowed by a weaker US Dollar
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NZD/USD steadies as traders digest inflation data from New Zealand and escalating EU-US trade tensions. The Kiwi benefits from US Dollar weakness despite softer than expected CPI print. NZD/USD defends support as long lower wick signals intraday bullish rebound. The New Zealand Dollar (NZD) is battling the US Dollar (USD) on Monday as traders weigh EU–US trade tensions against mixed domestic inflation data from New Zealand that could prompt RBNZ rate cuts. Statistics New Zealand released the Consumer Price Index (CPI) data for the second quarter on Sunday, which provided a mixed picture. While both the QoQ and YoY readings were both below estimates, inflation in the second quarter printed at 0.5% versus a 0.6% estimate, falling 0.9% previously. Meanwhile, the annual Q2 figure came in at 2.7%, below economist forecasts of 2.8% but above the previous 2.5% print. Although the RBNZ is keeping a close eye on price pressure, it is also aware that the economy is slowing. Comments from RBNZ policymakers have reinforced that the central bank is closely monitoring the slowdown and is open to rate cuts if disinflation persists and growth continues to underperform. At the May 28 Monetary Policy Press Conference, Acting RBNZ Governor Christian Hawkesby stated, “We’re seeing softening momentum in business investment, household spending, and the labour market. We’re in a data-dependent phase, and further easing is not off the table.” Despite the softer CPI, NZD/USD found support as the broader US Dollar retreated, driven by escalating trade tensions between the US and the European Union. US President Donald Trump’s renewed threats of tariffs on imports from the EU, including prospects of higher levies on pharmaceuticals and a 15%-20% baseline tariff even if a deal is reached has made traders increasingly weary. As the EU prepares potential retaliatory measures in the event that…
Filed under: News - @ July 21, 2025 8:25 pm