The New Zealand Dollar (NZD) showed limited movement against the US Dollar (USD) following remarks from Reserve Bank of New Zealand (RBNZ) Governor Anna Breman during the September Monetary Policy Review. Breman stated that the official cash rate (OCR) track remains closely aligned with May projections and emphasized that moving the OCR toward a neutral stance is still accommodative, allowing the central bank to address inflation while supporting the broader economy. She also noted that policymakers may need more time to assess the full impact of their current monetary stance. The RBNZ had previously raised the OCR by 25 basis points to 2.75%, as expected [1].
Technical analysis indicates that NZD/USD remains within an ascending channel, suggesting a bullish bias, but the pair maintains a bearish near-term tone as it trades below key moving averages. The 14-day Relative Strength Index (RSI) has retreated toward the low-40s, indicating building downside momentum. The NZD/USD pair is hovering near the lower boundary of the ascending channel at 0.5850, with a sustained break below this level potentially confirming a bearish reversal and targeting support at 0.5580 and 0.5485. On the upside, resistance is seen at the 50-day EMA of 0.5864 and the nine-day EMA at 0.5907, with a break above these levels reviving the bullish bias [1].
In contrast, the Japanese Yen (JPY) continues to underperform, with the USD/JPY pair reaching a fresh high since July 31, though it remains below 160.50. The Yen's weakness is attributed to fiscal concerns from rising bond yields, which increase Japan's debt servicing costs, while the US Dollar is buoyed by oil-driven inflation fears and expectations of a September Federal Reserve rate hike. The wide US-Japan interest rate differential supports the JPY carry trade, but expectations for faster Bank of Japan (BoJ) tightening cap further USD/JPY upside. Technical indicators for USD/JPY remain constructive, with the RSI in the mid-60s and the MACD slightly positive. Key resistance levels are at 160.64, 162.10, and 163.96, while support lies at 159.62, 158.59, and 157.32 [2].
Recent currency performance tables show that the New Zealand Dollar was the weakest against the US Dollar on the day, while over the last 30 days, the Japanese Yen was the strongest against the New Zealand Dollar [1][2].
CONCLUSION
The New Zealand Dollar remains under pressure against both the US Dollar and Japanese Yen, reflecting dovish signals from the RBNZ and broader market dynamics. Meanwhile, the Japanese Yen's underperformance persists despite technical support for USD/JPY, with market participants watching for potential policy shifts from the BoJ and upcoming US economic data. Overall, sentiment remains cautious with downside risks for NZD and limited upside for JPY in the near term.