- The NZD / USD is making up lost ground to hit the 0.6900 midrange level.
- Kiwi prolongs the recovery favored by a softer USD.
- The NZD / USD is expected to continue advancing towards 0.7200.
The New Zealand dollar It has appreciated against its US counterpart for the second day in a row, returning above 0.6900, after rebounding from the five-week lows at 0.6860, to 0.6945 so far. However, on the bigger picture, the pair remains negative, poised for its fourth consecutive weekly decline.
Kiwifruit recovers with US dollar in retreat
The NZD / USD it has recovered some ground in recent sessions, favored by a somewhat weaker dollar. Yields on US Treasuries, which had been driving the recent rally in the USD, have pulled back, and the 10-year yield fell below 1.5% for the first time since Monday. Additionally, the lack of progress in the fight for the US debt ceiling is raising concerns about the consequences of a government shutdown, adding negative pressure on the US dollar.
On the macro calendar, the US ISM manufacturing PMI for September beat expectations, rising to 61.1 in September from 59.9 in August. Beyond that, US consumer spending, a highly relevant contributor to US economic activity, increased 0.8% in August, versus a market consensus of 0.6%. However, the dollar has hardly been affected.
NZD / USD expected to continue appreciating towards 0.7200 – CIBC
From a broader perspective, the CIBC currency analysis team expects the kiwi to continue to appreciate, targeting 0.7200: “Support for NZD / USD looks firm at 0.68 and we expect any weakness to be contained before that (… ) “This is a rise of 25 or 50 basis points at the October 6 meeting, although an aggressive message will prevail anyway. We anticipate that NZD / USD will regain ground, potentially towards 0.72 “.
Technical levels
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