The New Zealand Dollar (NZD) weakened on Thursday, with NZD/USD trading near 0.5740, down 0.37% on the day, after briefly testing resistance around 0.5800 in the previous session. Despite improving domestic sentiment, the kiwi remains under pressure from broad US Dollar (USD) strength.
ANZ survey signals improving business confidence
New Zealand’s October ANZ Business Outlook survey pointed to a rebound in economic optimism. Business Confidence climbed to 58.1 — its highest level in eight months — from 49.6 in September.
The Activity Outlook index rose to 44.6, marking a six-month high, while Past Activity, a key proxy for GDP growth, remained steady at 5. Analysts at Brown Brothers Harriman (BBH) said the data confirms that “green shoots are emerging” in the New Zealand economy.
RBNZ still expected to ease policy further
Despite firmer business sentiment, markets continue to anticipate additional policy easing from the Reserve Bank of New Zealand (RBNZ). According to BBH estimates, traders are pricing in a 90% probability of a 25-basis-point rate cut to 2.25% at the RBNZ’s November 26 meeting. Policymakers have noted that underlying inflation is now comfortably within the 1%–3% target range, creating room for further monetary accommodation.
USD strength caps kiwi gains
The NZD remains weighed down by a stronger USD, supported by renewed optimism following the trade truce between Washington and Beijing and by the Federal Reserve’s (Fed) cautious but resolute tone after this week’s policy decision.
Market participants are now turning their attention to the release of New Zealand’s ANZ Roy Morgan Consumer Confidence Index for October, due later in the day, which could offer fresh insight into domestic demand and shape short-term expectations for RBNZ policy.
