Snapshot: NZD/USD sits near $0.59 after a brief rally yesterday, driven primarily by a weaker USD. RBNZ’s firmly entrenched easing bias continues to weigh on the Kiwi, with markets pricing in further rate cuts despite stable core inflation figures. Focus remains on the ISM Manufacturing PMI release at 10:00 ET.
- RBNZ Governor Orr’s signal of further easing if disinflation embeds acts as a firm ceiling on Kiwi strength.
- Risk of a squeeze on crowded shorts is a possibility if ISM data surprises to the downside.
Bias into NY: Downside pressure remains on the Kiwi given the RBNZ’s dovish stance; a break below $0.5850 would open the door for further losses. Trump’s geopolitical brinkmanship adds another layer of uncertainty, favouring USD strength.