FX.co ★ New Zealand Dollar Heads for Weekly Gain

The New Zealand dollar slightly declined to $0.602 on Friday, yet is positioned for a weekly gain, fueled by enhanced risk sentiment driven by the potential for further U.S. trade agreements. Investors' focus has shifted to the upcoming U.S.-China trade discussions next week, which aim to extend the deadline for the August 12 tariff suspension. This development follows a recent agreement between the U.S. and Japan and the prospect of a deal with the EU. Domestically, the probability of the Reserve Bank of New Zealand cutting its 3.25% cash rate by 25 basis points at its August meeting is currently priced at around 75%, although investors believe this may near the conclusion of the easing cycle. RBNZ Chief Economist Paul Conway indicated on Thursday that the central bank is ready to implement further rate cuts if expected reductions in price pressures materialize, cautioning that U.S. tariffs could impede economic growth and inflation. The kiwi has increased by 1% this week, breaking a two-week losing trend.