FX.co ★ NZ Dollar Approaches 8-Month Highs

On Monday, the New Zealand dollar increased to approximately $0.604, nearing the high it achieved last week, buoyed by positive sentiment regarding alleviated global trade conflicts. President Donald Trump announced that Treasury Secretary Scott Bessent, along with two other officials, will engage in renewed trade discussions with Chinese representatives in London on Monday. Concurrently, new data from China indicated ongoing deflationary challenges, as consumer prices declined for the fourth month in a row and producer prices experienced their most significant drop in almost two years. This exerted some downward pressure on the New Zealand dollar, given China's importance as a trading partner. Domestically, the Reserve Bank recently reduced the interest rate by 25 basis points to 3.25%. However, the decision made in May hints that the easing cycle might be approaching its conclusion. Markets currently anticipate that the RBNZ will maintain rates in July, while also considering the potential for a final rate cut in August.