The NZD/USD pair tumbled to near 0.5640, reaching its lowest level since April 10 during the early Asian session on Wednesday. The New Zealand Dollar (NZD) weakened against the US Dollar (USD) following the release of New Zealand’s jobless rate, which rose to the highest in nine years in the third quarter (Q3).
Data released by Statistics New Zealand showed that the unemployment rate increased to 5.3% in Q3 from 5.2% in Q2, aligning with market expectations. Employment remained unchanged compared to the previous three months, falling short of the estimated 0.1% increase.
Traders are now awaiting key US economic reports, including the ADP Employment Change and the ISM Services Purchasing Managers Index (PMI), both scheduled for release on Wednesday. These reports are expected to provide further guidance on the USD’s direction.
The Reserve Bank of New Zealand (RBNZ) has cut the Official Cash Rate (OCR) by 300 basis points since August of last year, bringing it down to 2.5%. Most economists anticipate an additional 25 basis point cut at the RBNZ’s final meeting of the year on November 26. This dovish monetary stance could continue to weigh on the NZD against the USD in the near term.
However, positive developments in US-China trade talks may help limit the downside for the Kiwi, often seen as a proxy for China due to the country’s close trade ties with New Zealand. According to a Bloomberg report released late Tuesday, US President Donald Trump announced a reduction in fentanyl-related tariffs on imports from China, lowering the rate from 20% to 10%. Additionally, some reciprocal levies on Chinese goods will remain frozen. These tariff adjustments are set to take effect on November 10.
Meanwhile, the US government shutdown has entered its sixth week, poised to become the longest federal funding lapse in the nation’s history after a short-term funding bill failed in the Senate once again. The latest attempt to break the impasse—passing Republican-backed temporary legislation—failed in the Senate for the 14th time on Tuesday.
Concerns that a prolonged US federal shutdown could negatively impact the US economy may undermine the Greenback against the New Zealand Dollar in the coming sessions.
https://bitcoinethereumnews.com/finance/new-zealand-dollar-slumps-below-0-5650-as-new-zealand-unemployment-rate-hits-nine-year-high/