The NZD/USD pair edged lower to around 0.5655 during Thursday’s Asian session. The US Dollar gained strength after the US House of Representatives approved a bill to end the government shutdown. Markets now look ahead to China’s October Retail Sales and Industrial Production data due on Friday.
On Wednesday, the House voted 222–209 in favor of a funding package to reopen the government, following the Senate’s approval earlier in the week. The bill now awaits President Donald Trump’s signature and will extend funding for most federal agencies until January 30, while providing full-year funding for select departments.
The reopening is expected to trigger a wave of delayed US economic data releases, including the closely watched monthly jobs report. Many traders believe the incoming data will show signs of economic slowdown, reinforcing expectations of a Federal Reserve rate cut in December — a development that could limit further USD strength.
Meanwhile, the New Zealand Dollar continues to face pressure. The Kiwi is close to becoming the first major developed-market currency to give up all its yearly gains against the USD, weighed down by aggressive Reserve Bank of New Zealand (RBNZ) rate cuts and a cooling domestic economy.
In its October meeting, the RBNZ lowered the Official Cash Rate (OCR) by 50 basis points to 2.5% after weaker GDP figures. Additionally, New Zealand’s unemployment rate recently climbed to a near nine-year high of 5.3%, increasing the likelihood of more rate cuts ahead. These factors are expected to keep NZD under pressure against the USD in the near term.
