The NZD/USD exchange rate has slumped in the past few months and has formed a death cross pattern, pointing to more downside as concerns about the New Zealand economy remains. It dropped to 0.5700, its lowest level since November 2025, down by 6.37% from its highest point in January this year.
New Zealand Dollar Slumps Amid Inflation Concerns
The NZD/USD exchange rate has come under pressure as the Iran war has continued, with the situation set to escalate later today when President Donald Trump decides to bomb Iranian infrastructure like bridges and power plants.
Such an attack will make the situation worse as Iran has threatened to attack major infrastructure projects in Israel and other countries in the gulf region. Such a move will lead to higher crude oil prices, with traders on Polymarket predicting that crude oil will get to $120 and above this month.
Higher crude oil prices will lead to strong inflation in New Zealand, a country that imports its oil and gas from other countries. The most recent data showed that the headline Consumer Price Index (CPI) rose to 3.1% in the fourth quarter, up from 2.1% in the first quarter of last year.
The next important catalysts for the NZD/USD pair will be the upcoming Federal Reserve minutes on Wednesday and key macro data in the following days. These minutes will show what the committee deliberated and provide a signal on what to expect later this year. Most economists expect the bank to leave rates unchanged in the next few minutes.
The US will publish the latest GDP and Personal Consumption Expenditure (PCE) report on Thursday. Economists believe that the data will show that the economy slowed substantially in the final quarter of the year. The US will also release the latest US inflation report on Friday.
NZD/USD Technical Analysis
The daily chart shows that the NZD/USD pair has pulled back in the past few months, moving from a high of 0.6091 in January to the current 0.5700. It has dropped below the Strong, Pivot, and Reverse level of the Murrey Math Lines tool.
The pair has now formed a death cross pattern as the 50-day and 200-day Exponential Moving Averages (EMA) crossed each other. Also, the Relative Strength Index (RSI) and the MACD have continued falling.
Therefore, the pair will likely continue falling, potentially to the next key point at the Ultimate Support level at 0.5620.