FX.co ★ New Zealand Dollar Holds Losses

The New Zealand dollar remained at approximately $0.585 on Wednesday, as expectations grew for additional monetary policy easing by the Reserve Bank due to the economic slack within the country. Recent figures indicated a significant drop in export volumes in the June quarter, contrasted by a substantial rise in import volumes, suggesting that trade likely had a negative impact on the GDP. Analysts now predict two additional interest rate cuts, potentially lowering the cash rate to 2.50%, a level not seen since mid-2022. However, the decline of the New Zealand dollar was partially mitigated by a general weakening of the US dollar, driven by increased speculation of an impending rate cut by the Federal Reserve this month amidst ongoing concerns regarding its independence. Domestically, investor focus is shifting to the forthcoming appointment of a new governor for the Reserve Bank of New Zealand, with Prime Minister Christopher Luxon hinting that an announcement could be made within weeks.