Key Moments
- NZD/USD trades around 0.6060 on Wednesday, up 0.25%, reaching a near two-week high amid ongoing US Dollar weakness.
- Markets anticipate 70,000 new US jobs and an unchanged 4.4% Unemployment Rate in the upcoming Nonfarm Payrolls release, keeping focus on Fed rate cut prospects.
- New Zealand’s Unemployment Rate climbs to 5.4% in Q4 2025, its highest level since 2015, prompting markets to price in over a 60% chance of a May RBNZ rate cut.
NZD/USD Climbs as Dollar Softens
NZD/USD trades near 0.6060 on Wednesday at the time of writing, up 0.25% on the session, marking a fresh near two-week high as the US Dollar (USD) remains under sustained selling pressure. The move reflects positioning ahead of the US Nonfarm Payrolls (NFP) report, with market participants taking a cautious stance as they reassess the interest rate outlook.
The US Dollar stays on the back foot as investors reinforce expectations that the Federal Reserve (Fed) will move toward monetary easing this year. In addition, mounting worries about the Fed’s independence weigh on sentiment toward the Greenback, keeping the US Dollar Index (DXY) pinned close to weekly lows. Any evidence of further cooling in the US labor market has the potential to bolster forecasts for additional rate cuts and prolong the USD’s corrective pullback.
Focus on US Labor Data and Fed Outlook
Later in the day, the NFP report is projected to show an increase of 70,000 jobs in January, with the Unemployment Rate seen holding steady at 4.4%. A downside surprise relative to these expectations would reinforce the view that US economic momentum is moderating, creating additional downside risk for the US Dollar in the near term.
In the short run, NZD/USD dynamics are likely to be driven primarily by the market response to the labor market figures, as well as by remarks anticipated from several Federal Reserve officials, which could further shape interest rate expectations.
Risk Sentiment Supports NZD Despite Mixed China Data
Improved risk appetite in global markets is currently lending support to cyclical currencies, including the New Zealand Dollar (NZD). This positive tone helps offset the impact of weaker inflation data from China.
China’s Consumer Price Index (CPI) increased 0.2% year-on-year in January, down from 0.8% previously, pointing to still-fragile domestic demand. At the same time, the Producer Price Index (PPI) stayed in negative territory for the 40th consecutive month, falling 1.4% on an annual basis and underscoring ongoing deflationary pressures in the world’s second-largest economy.
However, these readings also reinforce expectations that Chinese authorities may deliver further fiscal and monetary support. Such prospects are generally viewed as constructive for Asia-Pacific currencies, including the Kiwi.
Domestic Headwinds from New Zealand Labor Market
On the domestic front, the advance in NZD/USD faces a constraint from softening labor conditions in New Zealand. The Unemployment Rate rose to 5.4% in the fourth quarter of 2025, its highest level since 2015. This deterioration in the jobs market dampens the case for any additional tightening by the Reserve Bank of New Zealand (RBNZ).
Money markets are now assigning more than a 60% probability to a rate cut at the RBNZ’s May meeting, reflecting expectations that policymakers may need to respond to the weakening labor backdrop.
New Zealand Dollar Performance Against Majors
The table below presents the percentage change of the New Zealand Dollar (NZD) against major currencies today. According to the data, the New Zealand Dollar has been strongest relative to the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | — | -0.07% | -0.28% | -0.49% | -0.05% | -0.52% | -0.25% | -0.10% |
| EUR | 0.07% | — | -0.22% | -0.46% | 0.02% | -0.45% | -0.19% | -0.04% |
| GBP | — | 0.28% | 0.22% | -0.25% | 0.24% | -0.24% | 0.03% | 0.18% |
| JPY | 0.49% | 0.46% | 0.25% | — | 0.47% | -0.00% | 0.26% | 0.43% |
| CAD | 0.05% | -0.02% | -0.24% | -0.47% | — | -0.47% | -0.21% | -0.07% |
| AUD | 0.52% | 0.45% | 0.24% | 0.00% | 0.47% | — | 0.27% | 0.42% |
| NZD | 0.25% | 0.19% | -0.03% | -0.26% | 0.21% | -0.27% | — | 0.15% |
| CHF | 0.10% | 0.04% | -0.18% | -0.43% | 0.07% | -0.42% | -0.15% | — |
The heat map shows percentage changes of major currencies against each other. The base currency is taken from the left column, and the quote currency from the top row. For example, selecting the New Zealand Dollar from the left column and moving horizontally to the US Dollar cell provides the percentage change for NZD (base)/USD (quote).
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