Kiwi Dollar Gains on Softer US Dollar
The New Zealand dollar advanced to approximately $0.594 on Wednesday, continuing its upward trend from the prior session, buoyed by a weakening US dollar. This decline in the greenback followed consumer inflation data that came in softer than anticipated, bolstering expectations for potential rate cuts by the US Federal Reserve. Moreover, the New Zealand dollar was bolstered by optimism surrounding a potential de-escalation in trade tensions between the US and China, following their agreement to reduce high tariffs on each other's goods for 90 days. This is especially pertinent for New Zealand due to its substantial trade relationship with China, which is its largest trading partner. Domestically, market expectations are leaning towards an additional 25 basis points rate cut by the Reserve Bank of New Zealand later this month, with the current official cash rate of 3.5% anticipated to reach a low of 2.8% by the end of the year.
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