09.09.202502:51:52UTC+00New Zealand Dollar Approaches 4-Week High

The New Zealand dollar climbed to approximately $0.595 on Tuesday, marking its third consecutive day of gains and nearing a four-week high, buoyed by a weakening US dollar. The US dollar experienced continued pressure due to heightened expectations for deeper rate cuts in the US, prompted by new indicators of a declining labor market. Fed funds futures now suggest there is almost a 90% likelihood of a 25 basis point rate cut this month, with some investors also considering the possibility of a more substantial 50 basis point reduction. Meanwhile, within New Zealand, the Kiwi is under pressure from anticipated further monetary easing by the Reserve Bank of New Zealand (RBNZ). A significant decrease in second-quarter sales across multiple sectors has highlighted growth risks, reinforcing expectations for another rate cut at the RBNZ’s October meeting, following last month’s cash rate reduction and guidance indicating further easing. Additionally, subdued export figures from China exert downward pressure on New Zealand's export-dependent currency, given the nation's close trading relationship with Beijing.