Kiwi Slumps to Lowest Level Since 2025 Amid Wider Interest Rate Gap
The New Zealand Dollar (NZD) has continued its slide, reaching its lowest level since November 2025. Despite expectations of a third interest rate hike from the Reserve Bank of New Zealand (RBNZ), the Kiwi has fallen for six out of seven sessions.
The RBNZ's Official Cash Rate is now at 2.75%, up from two cuts in 2025, but still below the levels seen before those cuts. Meanwhile, the US Federal Reserve's policy rate is back to its November 2025 range of 3.75%-4.00%.
The key driver behind the NZD/USD pair's decline is the widening gap between US and New Zealand interest rates. The 10-year Treasury yield has surged to its highest level since 2002, attracting foreign investment into the US market and putting downward pressure on the Kiwi.
The next major test for the NZD/USD pair will come in the form of US payrolls data due out on Friday, with a forecasted 90K jobs added. A weaker-than-expected result could exacerbate the Kiwi's decline.