The New Zealand dollar rose to around $0.599, rebounding from a two-week low, supported by a weaker US dollar amid trade risks. This followed President Donald Trump’s announcement to raise global tariffs from 10% to 15% after the Supreme Court struck down his “reciprocal” tariffs. Nevertheless, gains were limited by fading expectations of a near-term rate hike. Governor Anna Breman said the economy has room to recover this year without triggering excessive inflation, as pressures ease gradually, suggesting only a limited need for aggressive rate increases. The central bank recently held the cash rate steady, noting policy will remain supportive as inflation gradually approaches the midpoint of the target range. Breman added a rate hike later in 2026 is possible but not fully priced in. Meanwhile, unexpectedly strong Q4 retail sales showed the economy maintained momentum late in 2025, supporting the case for a rate hike later this year.
