FX.co ★ New Zealand Dollar Declines

The New Zealand dollar declined to approximately $0.596 on Tuesday, surrendering recent gains amid heightened expectations that the Reserve Bank of New Zealand (RBNZ) may return to a policy of monetary easing due to weak economic indicators. Although annual inflation has climbed to its highest point in a year, it still fell short of predictions. Furthermore, the quarterly Consumer Price Index (CPI) continued to decelerate and also failed to meet forecasts. Analysts indicated that this data gives the RBNZ limited justification to anticipate that the CPI will achieve the upper limit of its 1–3% target range this year, thereby strengthening the argument for a rate cut at the upcoming August meeting. The probability of a rate cut, as interpreted by the market, rose to 85% from 61% before the release of the inflation figures. Further supporting this dovish perspective, New Zealand's trade surplus significantly narrowed in June to a five-month low, driven by a 19% surge in imports, which surpassed the 10% growth in exports. Meanwhile, global trade apprehensions continued to dampen sentiment following a statement by US Treasury Secretary Scott Bessent. He emphasized that the administration prioritizes the quality of trade agreements over deadlines, with President Trump set to decide on whether to extend deadlines for nations demonstrating progress.