FX.co ★ Kiwi Dollar Attempts to Rebound

The New Zealand dollar climbed to approximately $0.578 on Monday, attempting to recover from a five-month low, buoyed by the weakening of the US dollar. The decline in the greenback's value was largely attributed to escalating concerns over a possible US government shutdown. Meanwhile, market participants closely monitored forthcoming economic data releases, such as employment and manufacturing reports, which could influence the Federal Reserve's policy decisions. On the domestic front, the New Zealand dollar remained under pressure due to the anticipation of further monetary easing from the Reserve Bank of New Zealand (RBNZ). Market expectations predominantly favored a quarter-point rate cut to 2.75% in the coming week, with some speculators considering the possibility of a more significant half-point reduction. These sentiments were reinforced by a series of disappointing economic indicators, including a contraction in the GDP for the second quarter. Nevertheless, remarks by incoming RBNZ Governor Anna Breman, emphasizing a steadfast commitment to maintaining low and stable inflation, introduced some uncertainty into the monetary policy outlook.