NZD/USD rises to near 0.5800 following NZIER Q4 Business Confidence

NZD/USD rises as NZIER Business Confidence jumps to 48% in Q4 2025, the highest since March 2014.
NZIER’s Christina Leung said lower rates are feeding through, with the economic recovery gaining traction.
Traders await December US CPI data on Tuesday for clues on the Federal Reserve’s policy path.

Akhtar Faruqui FXStreet

NZD/USD gains ground for the second successive session, trading around 0.5780 during the Asian hours on Tuesday. The pair rises as the New Zealand Dollar (NZD) gains support after domestic Business Confidence climbed to 48% quarter-over-quarter in the fourth quarter (Q4) of 2025, its highest level since March 2014, up from 18% in the third quarter, according to the New Zealand Institute of Economic Research’s (NZIER) Quarterly Survey of Business Opinion.

Christina Leung, principal economist at NZIER, said the survey shows lower interest rates are finally feeding through to the economy and the recovery is gaining traction. Leung added that the improvement in sentiment was broad-based across sectors and regions, Reuters reported.

The upside of the NZD/USD pair could be restrained as the US Dollar (USD) edges higher ahead of the Consumer Price Index (CPI) data for December due later in the day. Traders could gain fresh clues on the Federal Reserve’s (Fed) policy path.

Markets are pricing in two Federal Reserve rate cuts this year, starting in June, though an upside inflation surprise could curb easing prospects. December’s Nonfarm Payrolls (NFP) missed expectations, reinforcing a more dovish Fed outlook. The CME Group's FedWatch tool shows that Fed funds futures price in about 95% probability that the US central bank will keep rates unchanged at its January 27–28 meeting.

Traders remain cautious amid growing worries about the Fed's independence. Federal prosecutors threatened to indict Fed Chair Jerome Powell over his congressional testimony on a building renovation, raising concerns over the Fed’s independence. Investors are also awaiting a US Supreme Court ruling on the legality of President Donald Trump’s tariff policies, expected on Wednesday.

New Zealand Dollar FAQs

What key factors drive the New Zealand Dollar?

The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.

How do decisions of the RBNZ impact the New Zealand Dollar?

The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.

How does economic data influence the value of the New Zealand Dollar?

Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.

How does broader risk sentiment impact the New Zealand Dollar?

The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.

Author

Akhtar Faruqui

FXStreet

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

AUD/USD regains mild traction, falters near 0.7150

AUD/USD gathers some steam and manages to flirt with the 0.7150 level on Thursday. However, the pair has retraced some of Wednesday’s significant pullback due to renewed selling pressure on the Greenback and a slight improvement in risk sentiment following hopes of a deal in the Middle East. Wrapping up the Australian docket, the RBA’s Hauser will speak early on Friday.

USD/JPY trades below 160.00 intervention threshold; bullish bias intact

The USD/JPY pair attracts some sellers during the Asian session amid fears that authorities will step in again to prop up the Japanese Yen. Furthermore, the Israel-Lebanon truce prompts some profit-taking around the US Dollar and exerts downward pressure on the currency pair.

Gold puts its 200-day SMA to the test near $4,420

Gold keeps the bullish stance in place in the latter part of Thursday’s session, although a convincing break above the key $4,500 mark per troy ounce still remains elusive. The precious metal’s advance comes amid the resurgence of some selling interest around the Greenback, improving risk sentiment, and declining US Treasury yields across the board.

XRP plummets as ETF outflows, geopolitical tensions reinforce bearish outlook

Ripple (XRP) edges lower, trading around $1.15 at the time of writing on Thursday, its lowest price since February 6. The cross-border money remittance token is extending the sell-off for the fifth consecutive day, reflecting persistent headwinds from ongoing geopolitical tensions and investor uncertainty.

Nonfarm payrolls: Testing the limits of Fed policy patience

The upcoming nonfarm payrolls report for May will provide the final update on the US labor market before Kevin Warsh attends his first policy meeting as the new Fed Chair later this month.

Recession on paper: What really moves the Canadian Loonie now?

Statistics Canada handed the headline writers a gift and the analysts a headache. Real GDP shrank 0.1% on an annualized basis in the first quarter, and with the fourth quarter of 2025 revised down to a 1.0% contraction, that is two negative quarters in a row, the textbook definition of a technical recession and Canada's first since the pandemic.