FX.co ★ Kiwi Dollar Hits Near 7-Month Low

The New Zealand dollar has depreciated to approximately $0.569, marking its lowest valuation since early April. This decline is driven by anticipated further rate reductions from the Reserve Bank. Currently, the market is nearly fully anticipating a 25 basis point cut scheduled for late November. This follows a prior 50 basis point reduction last month, attributed to sluggish economic performance and minimal inflationary pressures. Market participants are now focused on the upcoming third-quarter labor market report set to be released later this week, which is predicted to show the unemployment rate reaching its highest point in nearly nine years. Such conditions could reinforce the probability of continued monetary easing. Additionally, tepid manufacturing data from key trading partner China has heightened concerns over New Zealand exports, exerting additional pressure on the Kiwi dollar. Meanwhile, the strengthening US dollar has also contributed to the New Zealand dollar's decline, as officials from the Federal Reserve have expressed caution regarding further interest rate reductions.