NZD slumps in October
• Stronger than expected US economic data and rising odds of a Trump victory drove higher US rates and a higher USD
• The NZD was the worst performing of the majors, down nearly 6%
• Lower NZ-global rate spreads added to NZD downside pressure, contributing to weaker cross rates
NZD rises to a fresh 2024 high in September
• The Fed opted to kick-start its easing cycle with a 50bps cut; China ramped up policy stimulus to drive an economic recovery
• High risk appetite and lower US rates drove a broadly weaker USD; most FX majors made fresh 2024 highs against the USD
• Rates curves steepened as the global easing cycle gained traction; global equities pushed up to a fresh record high
August ascent after July Jolt for NZD
• After a volatile start, calm was restored to markets in August; by month-end the episode was long-forgotten.
• Despite the RBNZ significantly bringing forward the rate cutting cycle, the NZD outperformed, rising 5% against the USD.
• NZD crosses were all stronger, making up for the poor performance over July; NZD/JPY traded a range of over 8 big figures.