NZD Slides as USD Hits Yearly High Amid Higher Long-term Borrowing Costs

The New Zealand Dollar (NZD) has continued its downward trend against the US Dollar (USD), extending its slide as the USD hits a yearly high. The latest move is attributed to higher long-term US borrowing costs, with the 10-year Treasury yield reaching its highest level since 2002 on Thursday.

The gap between the New Zealand Official Cash Rate (OCR) and the Federal Reserve's policy rate has narrowed, but this has not been enough to stem the NZD's decline. The OCR is currently a quarter-point above where it stood before its November 2025 cut, while the Fed's range remains at 3.75%-4.00%, following its September 16 hike.

The Reserve Bank of New Zealand (RBNZ) may yet implement a third interest rate hike on October 28, but this is unlikely to have an immediate impact on the NZD/USD pair. The next key event for traders will be US payrolls data on Friday at 12:30 GMT, which is forecast to show a slowdown in job growth.