The New Zealand Dollar (NZD) is likely to stay between 0.5640 and 0.5670 in the short term. Longer-term predictions show the NZD’s decline has stabilized, with expectations to trade between 0.5605 and 0.5695, according to analysts at UOB Group. The analysis suggests that, despite hopes for the NZD to rise to 0.5675, it only reached 0.5669. Without any strong upward movement, the NZD will probably stay within the 0.5640 to 0.5670 range today.

Short Term Trading Range

In the next one to three weeks, the NZD is expected to remain within a broader range of 0.5605 to 0.5695. This outlook was noted on 11 November, and there haven’t been any changes since. We see that the New Zealand dollar’s recent weakness has leveled off, suggesting it will likely stay between 0.5605 and 0.5695 for the upcoming weeks. The lack of upward momentum indicates a phase of stability rather than any strong trends, pointing to a sideways market. This stability is supported by New Zealand’s recent economic data, with third-quarter 2025 inflation steady at 2.9%, within the target set by the Reserve Bank of New Zealand (RBNZ). In its last meeting, the RBNZ maintained a neutral stance with no rate changes expected until mid-2026. This lack of strong influences from the central bank is likely to keep the currency stable.

Policy Convergence

In the US, the Federal Reserve has also indicated a long pause, with less than a 20% chance of rate moves before the second quarter of 2026. This alignment between the two central banks limits large swings in the exchange rate. Compared to the high volatility and sharp drops seen throughout much of 2024, the current market is quite calm. For derivative traders, this calm environment favors strategies that benefit from low volatility and time decay. Selling options may be more beneficial than buying them since significant price changes are not expected. An iron condor strategy, with short strikes just outside the 0.5605 to 0.5695 range, could be good for premium collection. Traders should think about selling call options with strikes around or above 0.5700 and selling put options near 0.5600 for expirations in the coming weeks. The J.P. Morgan Global FX Volatility Index has also dropped to multi-year lows, indicating that it might be time to sell volatility rather than buy it. This market condition resembles periods in 2021 when range-bound strategies thrived. The biggest risk to this strategy would be unexpected economic data, particularly surprising inflation figures from the US or New Zealand, which could push a central bank to change its neutral stance. Therefore, traders should manage position sizes carefully to prepare for any sudden changes in sentiment. However, current indicators suggest the path of least resistance will be sideways. Create your live VT Markets account and start trading now.

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