NZD/USD inches higher to near 0.5900 following Q2 RBNZ Inflation Expectations release

NZD/USD gains ground as RBNZ Inflation Expectations rose to 2.29% quarter-over-quarter in Q2, up from 2.06% prior.
The risk-sensitive NZD has found support amid easing global trade tensions, following a preliminary agreement between the US and China.
The US Dollar remains confined to a narrow trading range, as recent US economic data has delivered mixed signals.

Akhtar Faruqui FXStreet

NZD/USD halts its two-day losing streak, trading around 0.5890 during the Asian hours on Friday. The pair advances after the release of the Reserve Bank of New Zealand (RBNZ) Inflation Expectations for Q2 2025.

Expectations rose to 2.29% quarter-over-quarter, up from 2.06% previously. This metric reflects business managers’ forecasts for annual CPI two years ahead. Additionally, the Business NZ PMI increased to 53.9 in April, compared to the prior reading of 53.2.

The risk-sensitive New Zealand Dollar (NZD) has gained support from easing global trade tensions. A preliminary agreement between the US and China has been reached, with the US set to lower tariffs on Chinese goods from 145% to 30%, while China will cut tariffs on US imports from 125% to 10%. Market sentiment has also been buoyed by renewed optimism surrounding a potential US-Iran nuclear deal.

Meanwhile, recent US economic data has painted a mixed picture—highlighting underlying resilience in the economy but also signaling a loss of growth momentum. This has kept the US Dollar trading within a narrow range.

In April, the US Producer Price Index (PPI) rose 2.4% year-over-year, easing from March’s 2.7% increase and falling short of the 2.5% market forecast. Core PPI, which excludes food and energy, increased by 3.1% annually—down from 4% previously. On a monthly basis, headline PPI declined by 0.5%, while core PPI dropped by 0.4%. Initial Jobless Claims for the week ending May 10 held steady at 229,000, matching both the prior week’s revised figure and market expectations.

Economic Indicator

RBNZ Inflation Expectations (QoQ)

The Inflation Expectations released by the Reserve Bank of New Zealand measures business managers´ expectations of annual CPI 2 years from now. An increase in expectations is regarded as inflationary which may anticipate a rise in interest rates. A high reading is positive (or bullish) for the NZD, while a low reading is seen as negative (or bearish).

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