FX.co ★ NZ Dollar Rebounds as US Dollar Softens

The New Zealand dollar strengthened to approximately $0.596 on Wednesday, marking the end of a four-day decline. This uptick was bolstered by a weakening US dollar, as investors exhibited caution in anticipation of the US Federal Reserve’s forthcoming policy decision. Although it is broadly anticipated that the Fed will maintain current interest rates, market participants are eager for any indications of a possible rate reduction in September. Meanwhile, on the trade negotiations front, the US and China wrapped up two days of talks. Both parties characterized the discussions as "constructive," expressing a commitment to prolong their 90-day tariff suspension. Nonetheless, Treasury Secretary Scott Bessent emphasized that any further extension remains contingent on President Donald Trump's decision, adding a layer of uncertainty to the outlook. Domestically, New Zealand's business confidence showed further improvement in July. However, many firms continue to face challenging conditions, with forward-looking activity indicators revealing a lack of momentum.