The NZD/USD currency pair traded 0.4% higher, reaching approximately 0.5820 during the European trading session on Thursday, as the New Zealand Dollar (NZD) outperformed other major currencies despite disappointing economic data from New Zealand [1]. Stats NZ reported that New Zealand's economy grew by 0.2% in Q4, falling short of estimates of 0.4% and significantly lower than the revised 0.9% growth in Q3 2025 (previously 1.1%). On an annualized basis, GDP growth was 1.3%, below the forecast of 1.7% but above the previous reading of 1.1%, which was revised down from 1.3% [1].
The currency heat map indicated that the NZD was the strongest against the US Dollar, posting a 0.31% gain, and also showed notable strength against other major currencies such as EUR (+0.20%), GBP (+0.23%), and JPY (+0.24%) [1]. Despite this performance, technical analysis suggests a bearish outlook for NZD/USD. The pair remains below the declining 20-day Exponential Moving Average (EMA), indicating that recent rebounds are contained within a broader downswing from early-month highs near 0.6050. The 14-day Relative Strength Index (RSI) has hovered near 40 for almost a week, signaling that bears are in control and further downside is highly likely [1].
Analysts at ANZ have cautioned that rising oil prices, driven by Middle East conflicts, are expected to fuel inflation in the near term and negatively impact New Zealand's economic outlook [1]. Meanwhile, the US Dollar Index (DXY) was steady around 100.20, with sentiment turning broadly upbeat as traders anticipate the Federal Reserve will keep interest rates unchanged throughout the year, according to the CME FedWatch tool [1].
CONCLUSION
Despite a short-term rise in NZD/USD, weak GDP data and bearish technical signals suggest further downside risk for the pair. Analyst warnings about inflationary pressures from higher oil prices add to concerns about New Zealand's economic outlook. The market impact is medium, with traders closely watching both economic fundamentals and technical indicators.