- The NZD/USD reaches its highest level since October 2024 amid the sustained weakness of the US dollar.
- The widespread weakness of the US dollar persists in the midst of a moderate landscape of the Fed and tax concerns.
- Trump meets with GOP leaders to boost a project of deficit law of 3.3 billion dollars before July 4.
- Jobs full in New Zealand increased only 0.1% in May, the labor market about a minimum of 28 months.
The New Zealand dollar (NZD) extends its winning streak against the US dollar (USD) on Monday, with the NZD/USD rising to 0.6090 – its highest level since October 2024 – as the generalized weakness of the dollar continues to feed the profits.
The Kiwi is driven by the generalized weakness of the USD, backed by a more moderate panorama of the Federal Reserve (Fed), increasing tax concerns in the US and a persistent commercial uncertainty. Investors are now focusing their attention on the key data of the US labor market, which will be published later this week, which could reveal signs of cooling and reinforce the expectations of a Fed rates cut as soon as in September.
Meanwhile, the US dollar index (DXY), which tracks the value of the dollar against a basket of six main currencies, continues its decrease, falling below the 97.00 mark and quoting around 97.85 at the time of writing this report.
In Washington, fiscal concerns remain the center of attention while the US president Donald Trump presses to approve a broad tax and expenses package that is projected to add 3.3 billion dollars to the national debt. Trump meets with the leader of the majority of the Senate, John Thune, and the president of the House of Representatives, Mike Johnson, in the White House on Monday to ensure republican support before a firm scheduled for July 4.
“We need all the weight of the Republican conference behind this bill – and we hope they do it,” said the White House Secretary, Karoline Leavitt. The proposed package is feeding the market restlessness on the sustainability of the long -term debt of the US, reinforcing the downward pressure over the US dollar.
The New Zealand labor market showed signs of cooling, with full jobs increasing only 0.1% to 2.35 million in May, Statistics New Zealand reported Monday in Wellington. Despite the slight monthly increase, the total number of full jobs is maintained about a minimum of 28 months, with the April revised figure marking the weakest level since January 2023. The latest figures reinforce a series of weak data, ranging from the contraction of manufacturing activity to the fall in consumer spending. Economists expect the unemployment rate to increase in the seconds and third quarter as the unpredictable commercial policies of President Donald Trump erosion business confidence.
Growth forecasts for the second quarter are still moderate. ASB projects an expansion of 0.3%, while the GDP forecast of the New Zealand Reserve Bank (RBNZ) points to a growth of only 0.1%. The Minister of Finance, Nicola Willis, warned last week that uncertainty about tariffs and tensions in the Middle East have affected business feeling and investment, saying that it will be “very challenging to maintain the previous level of growth.”
The demand in cooling and softer salary pressure have strengthened the case for the RBNZ to loosen its policy. While several analysts expect the Central Bank to maintain the Official Cash rate (OCR) in 3.25% on July 9, the markets are valuing a 25 basic points cut for August. Swaps data suggest a probability of less than 40% of more reductions this year.
New Zealand Faqs dollar
The New Zealand dollar (NZD), also known as Kiwi, is a well -known currency among investors. Its value is largely determined by the health of the neozyous economy and the policy of the country’s central bank. However, there are some peculiarities that can also make the NZD move. The evolution of the Chinese economy tends to move Kiwi because China is the largest commercial partner in New Zealand. The bad news for the Chinese economy is probably translated into less neozyous exports to the country, which will affect the economy and, therefore, its currency. Another factor that moves the NZD is the prices of dairy products, since the dairy industry is the main export of New Zealand. The high prices of dairy products boost export income, contributing positively to the economy and, therefore, to the NZD.
The New Zealand Reserve Bank (RBNZ) aspires to reach and maintain an inflation rate between 1% and 3% in the medium term, with the aim of keeping it near the midpoint of 2%. To do this, the Bank sets an adequate level of interest rates. When inflation is too high, RBNZ rises interest rates to cool the economy, but the measure will also raise bond performance, increasing the attractiveness of investors to invest in the country and thus boosting the NZD. On the contrary, lower interest rates tend to weaken the NZD. The differential type of types, or how they are or is expected to be the types in New Zealand compared to those set by the Federal Reserve of the US, can also play a key role in the NZD/USD movement.
The publication of macroeconomic data in New Zealand is key to evaluating the status of the economy and can influence the valuation of the New Zealand dollar (NZD). A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and can encourage the New Zealand reserve bank to increase interest rates, if this economic strength is accompanied by high inflation. On the contrary, if the economic data is weak, the NZD is likely to depreciate.
The New Zealand dollar (NZD) tends to strengthen during periods of appetite for risk, or when investors perceive that the general market risks are low and are optimistic about growth. This usually translates into more favorable perspectives for raw materials and the so -called “raw material currencies”, such as Kiwi. On the contrary, the NZD tends to weaken in times of turbulence in markets or economic uncertainty, since investors tend to sell the most risky assets and flee the most stable shelters.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
