FX.co ★ Kiwi Dollar Hovers Near Two-Week High

The New Zealand dollar recently strengthened to approximately $0.576, nearing a two-week peak. This improvement is attributed to renewed optimism regarding the US-China trade discussions, which have the potential to alleviate some risks associated with New Zealand's export-dependent economy. Over the past weekend, US and Chinese negotiators reached consensus on several key issues. Additionally, Treasury Secretary Bessent stated that President Trump's threat of imposing a 100% tariff has been retracted ahead of the forthcoming talks between the two leaders. Despite this, the New Zealand currency continues to face pressure amid anticipations of additional monetary easing by the Reserve Bank of New Zealand (RBNZ). Last week, headline inflation reached a one-year high in the third quarter. However, the RBNZ's preferred inflation measure remained at its lowest point since early 2021, indicating modest inflationary pressures. This data aligns with the central bank’s economic forecasts, leading traders to fully anticipate a 25 basis point rate cut in November, while there are minimal expectations for a more substantial change. The currency is currently on track for a fourth consecutive monthly decline.