15.09.202502:09:38UTC+00New Zealand Dollar Rises

On Monday, the New Zealand dollar appreciated to approximately $0.596, recovering from previous session declines and approaching a four-week peak. This upward movement was bolstered by a weakened US dollar in anticipation of the widely forecasted FOMC rate cut later this week. Current market sentiment indicates a 96% likelihood of a 25 basis point reduction this Wednesday, with a mere 4% chance of a more significant half-point cut. This outlook stems from recent US data suggesting a softened labor market and decreased inflation pressures. Domestically, the most recent PMI survey revealed further weakening in the services sector throughout August, persisting well below its long-term average and extending its contraction streak to an 18-month duration. These discouraging findings highlighted the ongoing sluggishness of the economy and fortified expectations for additional monetary easing by the Reserve Bank. Governor Christian Hawkesby has recently reinforced the guidance for another 50 basis point cut by year's end, contingent upon forthcoming data. Investors are now closely monitoring Q2 GDP figures and the August trade balance.