FX.co ★ New Zealand Dollar Rebounds

The New Zealand dollar strengthened to approximately $0.588 on Friday, reversing a two-day downturn as the US dollar weakened due to disappointing economic data, which increased speculation of further Federal Reserve rate reductions this year. The latest figures revealed an unexpected decline in US producer prices, marking the steepest drop in five years, coupled with a slowdown in retail sales growth. On the domestic front, the market continues to anticipate a further 25 basis points cut by the Reserve Bank of New Zealand later this month, amid a sluggish economy. However, investors are beginning to believe that the central bank's easing cycle may be approaching its conclusion, with rates projected to bottom out at 3.0%. Despite Friday's recovery, the New Zealand dollar is poised for its third consecutive weekly loss after a turbulent week, where it initially gained on news of a US-China tariff agreement, only to face selling pressure at critical technical thresholds.