Kiwi Dollar Attempts to Rebound

The New Zealand dollar rose to around $0.578 on Monday, attempting to rebound from a five-month low as weakness in the US dollar provided support.

The greenback came under pressure amid mounting concerns over a potential US government shutdown, while traders remained focused on upcoming economic releases, including jobs and manufacturing reports, that could shape the Federal Reserve’s policy outlook.

Domestically, the Kiwi remained pressured by expectations of further monetary easing from the Reserve Bank, with markets largely pricing a quarter-point cut to 2.75% next week and some assigning a small chance of a larger half-point move.

These expectations were reinforced by a run of weak economic data, including a Q2 GDP contraction, though comments from incoming RBNZ Governor Anna Breman stressing a commitment to low, stable inflation added uncertainty to the policy outlook.