Above: NZD on November 07.
The New Zealand dollar is coming under pressure right across the board.
A selloff in global stock markets is weighing heavily on the New Zealand Dollar ahead of the weekend, ensuring it is lower against all its major peers and extending a long-running trend of underperformance.
Weakness reaffirms the Kiwi's relationship with broader sentiment, ensuring it tends to fall when market confidence evaporates.
"In the risk-off environment, the NZD and AUD underperformed. The NZD is down roughly 1% against the yen, euro and Pound," says a note from ASB.
U.S. stock markets are set to follow Asian and European peers and open deep in the red as they resume a selloff linked to fading odds of a December interest rate cut.
A combination of still-high inflation and evidence that the country's jobs market remains steady has prompted a number of Federal Reserve members to indicate they think it would be prudent to keep interest rates steady in December.
Markets were expecting a Fed cut in December, but the risk of disappointment is starting to dawn on investors.
Assets with a strong positive correlation with the global investor pulse, like the NZD, will struggle under such an environment.
The pound to New Zealand dollar exchange rate (GBP/NZD) clearly reflects this sentiment, rallying to 2.3345 on Friday, and it looks as though the 2025 peak at 2.3520 could come into contention again.
Momentum is broadly constructive, with the RSI rising to 60 and the level of spot breaking above the 21-day exponential moving average.