New Zealand trades lower after the Federal Reserve left rates unchanged

Daily Currency Update

The New Zealand dollar is slightly weaker this morning when valued against the Greenback, currently trading at US$0.5957 at time of writing. New Zealand's central bank said on Wednesday that risks to the financial system have increased over the past six months due to a more volatile global economic environment, but the country's banks remain in a strong position. Geopolitical risks have escalated following US tariffs on goods imports from many countries, including New Zealand, said Reserve Bank of New Zealand (RBNZ) Governor Christian Hawkesby in a statement accompanying the Financial Stability Report. While New Zealand moved out of recession in the fourth quarter of last year, the economy remains soft and sentiment weak. Data published earlier on Wednesday showed persistent weakness in the jobs market in the first quarter, with the unemployment rate at 5.1%. The RBNZ has cut the cash rate by 200 basis points since August last year to 3.5% as it tried to prop up the economy, and is expected to cut further this year. National house prices are still sitting around 13% below their peak in November 2021, and have shown little movement over the past 12 months, according to the report. The market remains soft overall, with a high volume of unsold stock and weak net migration limiting upward momentum. The central bank expects 60% of home loans to reprice to lower rates within six months, and 80% within a year, easing debt serviceability pressures that spiked when rates hit their peak.