FX.co ★ New Zealand Dollar Extends Gains

The New Zealand dollar climbed to approximately $0.593 on Monday, building on gains from the prior session. This uptick was fueled by weekend discussions between the US and China that bolstered global market sentiment. Representatives from both nations hinted at a favorable outcome, with Beijing signaling the intention to initiate formal negotiations and Washington acknowledging advancements towards an agreement. Nonetheless, the gains were curbed by data released on Saturday from China, revealing that consumer prices declined for the third consecutive month, and producer prices experienced the most significant drop in six months—underscoring subpar domestic demand in New Zealand's primary trading partner. Domestically, the Kiwi continued to face pressure from expectations of further interest rate cuts by the Reserve Bank of New Zealand. Recent data indicated a weakening labor market and subdued wage growth, strengthening the central bank’s inclination towards a 25 basis point cut this month. Markets are also anticipating a reduction in rates to 3% by the end of the year, with three additional cuts projected for 2025.