FX.co ★ New Zealand Dollar Weakens

The New Zealand dollar depreciated to approximately $0.574 on Tuesday, relinquishing gains from the previous session, primarily due to expectations of continued policy easing by the Reserve Bank. While recent third-quarter inflation data indicated a rise in prices to a one-year peak of 3%, hitting the upper limit of the central bank’s target range, the Reserve Bank of New Zealand’s preferred inflation gauge remained stable at its lowest point since early 2021. Furthermore, other core inflation measures also reflected restrained pressures. The central bank had long foreseen the potential for inflation to surpass its target, rendering the latest figures as a comforting result. Market participants are fully anticipating a 25 basis points rate cut in November, with a marginal likelihood of a 50 basis points reduction. On a positive note, sentiment was bolstered by signs of de-escalating US-China trade tensions, as officials are poised to meet this week in anticipation of President Trump's forthcoming discussions with President Xi.