US Dollars Per New Zealand Dollar

IBISWorld forecasts the US$/NZ$ exchange rate to increase by 1.8% in 2024-25, to $0.6213. The Reserve Bank of New Zealand is likely to maintain the current cash rate level and is even considering a rate hike in line with its “higher for longer” rate policy. New Zealand is expected to witness a rate cut in late 2025 as the RBNZ is apprehensive about sticky inflation. Declining expectations of a rate cut are boosting the New Zealand dollar’s strength against the US dollar. Improving retail sales in the country are also benefiting the New Zealand dollar as it signals the central bank to tread cautiously with rate cut decisions. However, the US Federal Reserve’s similar disposition is also strengthening the USD, limiting the increase in the exchange rate.

In December 2020, the US Federal Reserve extended its temporary currency swap agreements with nine central banks until December 2021 to ease the pressure on demand for USD liquidity. The nine central banks were Australia, Brazil, Denmark, South Korea, Mexico, Norway, New Zealand, Singapore and Sweden. The move by the US Federal Reserve to increase supply of US dollars supported an increase in the US$/NZ$ exchange rate in 2021-22. Furthermore, New Zealand’s relative success in containing COVID-19 led to the exchange rate rising over the two years through 2021-22.