The New Zealand dollar (NZD) has faced downward pressure recently as market sentiment turned negative, overshadowing an upbeat report on domestic business confidence. As of now, the NZD trades near 90-day lows against the US dollar at approximately 0.5715, reflecting a decline of 2.2% from its 3-month average of 0.5846. Analysts attribute this drop to a broader shift in risk appetite within global markets.
Key economic developments have also influenced the NZD. Inflation in New Zealand reached 3.0% in Q3 2025, coinciding with expectations and touching the upper limit of the Reserve Bank of New Zealand's (RBNZ) target range. This uptick was largely driven by rising electricity prices, rent, and local government taxes. In response to economic strains, the RBNZ cut the official cash rate by 50 basis points to 2.5%, with projections for inflation to moderate to around 2% by mid-2026, suggesting a cautious outlook for growth.
Further affecting the market, the RBNZ announced plans to ease mortgage loan-to-value ratio restrictions starting December 1, 2025. This policy aims to enhance access to credit, particularly for first-time homebuyers, which may stabilize the housing market after recent price declines.
The NZD's performance is also reflected against other currencies, sitting at 7-day lows near 0.4927 against the Euro, down 1.6% from its 3-month average of 0.5007. In contrast, the NZD to GBP remains stable at 0.4344, approximately in line with its 3-month average, while the NZD to JPY is performing slightly better at 88.00, 1.0% above its average.
As New Zealand looks to strengthen its regional trade ties amidst ongoing US-China trade tensions, the 'kiwi' remains closely tied to market dynamics and investor sentiment. With the potential for further volatility in global markets, businesses and individuals engaged in international transactions should remain vigilant and consider these developments in their currency planning.
