NZD Tumbles Below 0.5900 as Unemployment Hits Decade High
The New Zealand Dollar (NZD) suffered a sharp decline against the US Dollar (USD), falling below the 0.5900 mark on Wednesday following the release of dismal unemployment data.
The country's unemployment rate rose to 5.3% in the second quarter of 2025, its highest level since 2015 and surpassing market forecasts of 5.0%. This marked a significant deterioration in New Zealand's labor market, with employment growth remaining stagnant and the number of unemployed persons increasing by 25,000 quarter-on-quarter.
The weak labor market figures added to a series of disappointing economic indicators, including subdued retail sales and declining business confidence. Economists noted that the Reserve Bank of New Zealand (RBNZ) had previously anticipated a gradual softening, but the sharp rise in unemployment suggests the economy may be cooling faster than expected.
The RBNZ's policy expectations shifted significantly after the data release, with interest rate futures now pricing in a higher probability of a 50-basis-point cut at the next policy meeting in August. The NZD/USD pair dropped to an intraday low of 0.5885, its weakest level in over two months.