The NZDUSD has been on an upward trend, reaching a five-month high of $0.63. This surge was largely due to the US Federal Reserve’s dovish stance on monetary policy, which put pressure on the US dollar and boosted other major currencies. The NZDUSD also gained from an increase in commodity prices, which was a result of supply disruptions following the Red Sea attacks. The possibility of lower interest rates also improved the demand outlook.
On the domestic front, the head of New Zealand’s central bank recognized the unexpected dip in recent growth data. This led to speculation about a potential decrease in the cash rate sooner than expected. Market predictions now point to a rate cut by the Reserve Bank of New Zealand (RBNZ) as early as May next year. In the previous month, the RBNZ held the cash rate at 5.5%, but cautioned that another rate increase might be needed if inflation remains persistent.