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>>NZD/USD Review: Unexpected Retail Outperformance Doesn't Trigger Major RBNZ Rate Adjustment – March 2025 Market Overview

NZD/USD Review: Unexpected Retail Outperformance Doesn't Trigger Major RBNZ Rate Adjustment – March 2025 Market Overview

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about 10 hours ago

Economic Data & Policy

February retail sales rose 1.8% MoM, far above the 0.7% forecast, yet the RBNZ kept its cash rate at 5.50%. Inflation eased to 3.2% YoY and commodity prices, especially dairy, fell 2.1%, limiting pressure for tighter policy. With the Fed’s rate at 4.50‑4.75%, the NZD still enjoys a 75‑100‑bp differential, supporting the currency despite mixed fundamentals.

Technical Landscape

NZD/USD trades in a 0.6100‑0.6250 range, with the 50‑day MA at 0.6150 offering near‑term support and the 200‑day MA at 0.6050 providing deeper footing. Resistance at 0.6250 has been tested three times since December 2024, while implied volatility sits at 8.5%, below the 10.2% annual average. Speculative short positions have fallen 15% since January, reflecting modest downside hedging.

Future Outlook

The RBNZ projects 1.2% GDP growth in 2025 and expects inflation to reach the 2% midpoint by late 2026, suggesting policy stability through mid‑year. Key data releases—June GDP, July inflation, and the April 9 rate decision—will shape market expectations. Compared with AUD, JPY and EUR, the NZD remains range‑bound, with international investors holding about NZD 45 bn of government bonds that are sensitive to rate differentials.