NZ dollar drops on strong US data and tariff concerns

The New Zealand dollar fell to around $0.562 on Wednesday, weighed down by a stronger US dollar as upbeat economic data led to higher Treasury yields.

NZ dollar drops on strong US data and tariff concerns

Stronger-than-expected job openings from the JOLTS report and better-than-anticipated ISM services data suggested that the Federal Reserve may slow its rate-cutting cycle. Meanwhile, investors are closely watching the potential impact of President-elect Donald Trump's tariff policies, particularly those targeting China. These policies could add additional pressure on the Kiwi dollar, as New Zealand's economy relies heavily on China as a significant export market.

Traders expect 50bps rate cut from NZ central bank

Domestically, traders increasingly expect the Reserve Bank of New Zealand to implement a larger-than-expected 50 basis point rate cut in February, given the deeper economic contraction.