New Zealand Dollar Retreats

The New Zealand dollar hovered around $0.578, holding at its highest level in over five weeks, supported by expectations that the Reserve Bank’s easing cycle has likely come to an end.

While the central bank recently cut rates by 25 bps as expected, its latest forecasts suggested limited scope for further easing, assigning just a one-in-five chance of another cut next year as inflation pressures cool and the economic outlook improves.

This view echoes remarks from newly appointed Governor Anna Breman, who stated that recent rate cuts should help support growth and employment, while emphasizing that controlling inflation remains a priority, particularly to protect the purchasing power of lower-income households.

As a result, markets are increasingly pricing in the central bank’s next move as a rate hike, though not until late 2026.

The antipodean currency is also supported by a softer US dollar, as markets anticipate a Federal Reserve rate cut this week.

EUR/USD

• 1.1800 (EUR 1.99 bn)
• 1.1650 (EUR 976.48 mn)
• 1.1575 (EUR 892.51 mn)

USD/JPY

• 156.00 (US$ 1.67 bn)
• 155.00 (US$ 1.73 bn)
• 153.00 (US$ 778.82 mn)

GBP/USD

• 1.3500 (GBP 500.00 mn)
• 1.3050 (GBP 740.00 mn)

USD/CHF

• 0.8020 (US$ 180.00 mn)
• 0.7975 (US$ 100.00 mn)

USD/CAD

• 1.3940 (US$ 1.12 bn)

AUD/USD

• 0.6665 (AUD 301.57 mn)
• 0.6595 (AUD 400.22 mn)
• 0.6475 (AUD 864.67 mn)

NZD/USD

• 0.5730 (NZD 926.14 mn)

EUR/GBP

• 0.8845 (EUR 200.11 mn)
• 0.8590 (EUR 175.00 mn)

Justin prepared a weekly overview before leaving for the holidays here. For more information on how to use this data, you may refer to this post here. This article was written by Giuseppe Dellamotta at investinglive.com.

The New Zealand dollar hovered around $0.572, near a one-month high, supported by the Reserve Bank’s hawkish outlook.

The central bank cut its cash rate by 25bps to 2.25% on Wednesday, the lowest since June 2022, but signalled this may be the end of its easing cycle, with updated projections implying just a 20% chance of another reduction next year.

On Thursday, RBNZ officials expressed confidence that the economic recovery is underway, with Governor Christian Hawkesby noting that early indicators point to economic expansion in the second half of the year and that demand has stabilized.

Reinforcing this view, latest data showed retail sales rose much faster than expected in the third quarter, while business confidence surged to an 11-year high in November.

So far this week, the kiwi has gained nearly 2% and is on track for its best week since April.

The New Zealand dollar rose more than 1% to $0.568, its highest level in three weeks, after the Reserve Bank cut interest rates as expected but signaled it may be nearing the end of its easing cycle.

The RBNZ lowered its cash rate by 25bps to 2.25%, the lowest level since June 2022, as it aims to support a sluggish economic recovery.

However, the central bank's updated projections had a more hawkish tilt, with its forward guidance showing the cash rate falling to 2.2% in the second quarter next year, implying only a modest chance of an additional cut.

By the end of 2026, the rate is projected to rise slightly to 2.28%.

This prompted traders to sharply scale back expectations for further easing.

EUR/USD

• 1.1680 (EUR 1.30 bn)
• 1.1625 (EUR 1.39 bn)
• 1.1500 (EUR 1.50 bn)

USD/JPY

• 155.00 (US$ 761.93 mn)

GBP/USD

• 1.3435 (GBP 282.82 mn)

USD/CHF

• 0.8050 (US$ 408.74 mn)
• 0.7870 (US$ 212.00 mn)

USD/CAD

• 1.4200 (US$ 519.71 mn)
• 1.4120 (US$ 723.08 mn)
• 1.3970 (US$ 770.60 mn)
• 1.3900 (US$ 693.89 mn)

AUD/USD

• 0.6550 (AUD 3.03 bn)

NZD/USD

• 0.5480 (NZD 1.01 bn)

EUR/GBP

• 0.8810 (EUR 409.27 mn)

For more information on how to use this data, you may refer to this post here. This article was written by Giuseppe Dellamotta at investinglive.com.

EUR/USD

• 1.1600 (EUR 2.11 bn)
• 1.1500 (EUR 3.00 bn)

USD/JPY

• 155.00 (US$ 1.61 bn)

GBP/USD

• 1.3250 (GBP 1.05 bn)
• 1.2900 (GBP 597.22 mn)

USD/CHF

• 0.8050 (US$ 280.70 mn)
• 0.7940 (US$ 302.49 mn)

USD/CAD

• 1.4055 (US$ 278.90 mn)
• 1.3275 (US$ 340.00 mn)

AUD/USD

• 0.6500 (AUD 689.52 mn)
• 0.6550 (AUD 445.6 mn)

NZD/USD

• 0.5675 (NZD 300.00 mn)
• 0.5455 (NZD 530.00 mn)

EUR/GBP

• 0.8750 (EUR 843.50 mn)

For more information on how to use this data, you may refer to this post here. This article was written by Giuseppe Dellamotta at investinglive.com.