FxNews – We’ve noticed that the New Zealand dollar is currently trading under $0.625, marking its lowest point in more than two weeks. This decline is mainly due to a resurgence of the US dollar as market players adjust their expectations regarding the Federal Reserve’s potential interest rate cuts this year. Additionally, a shift towards caution in market sentiments impacts the ‘kiwi.’ This trend is evident as stock and commodity markets withdraw from their recent peak levels, alongside a rise in Treasury yields.
In New Zealand, the financial markets anticipate up to four rate cuts by the Reserve Bank of New Zealand (RBNZ) throughout this year, with the initial cut potentially happening as early as May. Recent comments from the head of the RBNZ have highlighted unexpected shortcomings in the latest economic growth figures, fueling speculation about an imminent decrease in the cash rate. Although the RBNZ maintained the cash rate at 5.5% in November, it was a narrow decision that almost resulted in an additional rate hike.