During European trading hours on Friday, the NZD/USD currency pair remained in a narrow range near the key psychological level of 0.6000. The pair showed signs of consolidation as investors awaited clearer signals on the next steps from the United States regarding the situation with Iran.
US Signals No Immediate Involvement in Israel-Iran Conflict
On Thursday, White House officials indicated that Washington has no plans to directly engage in the Israel-Iran conflict at this time. The US said it would make further decisions within the next two weeks. This announcement boosted investor risk appetite, increasing demand for riskier assets such as the New Zealand Dollar.
US Dollar Safe-Haven Demand Drops
Following the White House comments, the safe-haven demand for the US Dollar weakened. The US Dollar Index (DXY) fell from Thursday’s weekly high of 99.15 to 98.60, reflecting a decline in investor preference for the greenback amid reduced geopolitical fears.
China’s Central Bank Keeps Interest Rates Unchanged
Meanwhile, the People’s Bank of China (PBoC) maintained its interest rates as expected during its policy meeting earlier Friday. The one-year loan prime rate remained at 3.00%, and the five-year rate stayed at 3.50%. Reuters reported that the PBoC emphasized liquidity support rather than further rate cuts, aiming to protect bank profit margins.
PBoC Decisions Impact New Zealand Dollar
China’s monetary policy has a strong influence on the New Zealand Dollar because New Zealand’s economy depends heavily on exports to China. Stability in China’s rates can affect NZD demand.
NZD/USD Shows Limited Volatility, Moves Sideways
The Kiwi dollar traded well within Thursday’s range, showing reduced volatility. It hovered around the 20-day Exponential Moving Average (EMA) near 0.6003, indicating a sideways trend. The 14-day Relative Strength Index (RSI) remained between 40 and 60, signaling investor indecision.
Potential Price Targets for NZD/USD
If the NZD/USD breaks above the June 19 high of 0.6040, it could move toward the September 11 low of 0.6100 and then the October 9 high of 0.6145.
On the downside, a drop below the May 12 low of 0.5846 may open the way for further declines toward the round support level of 0.5800, followed by the April 10 high at 0.5767.
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