January jitters as Trump threatens tariffs
• Currency markets were jumpy in January, reacting to Trump’s soundbites on tariffs, but without any material reaction overall.
• NZD/USD recovered from a nearly 12% plunge in Q4 to show some signs of stability through January and a modest net gain.
• The NZD was up on most crosses; net moves in global rates were modest; global equity markets reached a fresh record high.
NZ Dollar Dive Deepens in December
• The NZD made another hefty fall in December, extending its fall through Q4 to over 11%.
• Contrasting economic fortunes between the US and NZ economy remained notable, with robust US growth continuing against a deeper recession in NZ; NZ-US rate spreads went negative, including longer maturities.
• Anticipation of Trump’s polices remained a key driver for USD strength and NZD (and other currency) weakness
Dollar dances to tune of Trump’s triumph
• USD broadly stronger in November, following Trump’s victory and signs of a stronger for longer US economy
• NZD falls to a fresh 2024 low below 0.58 before finding support; ends down less than 1% for the month
• EUR underperforms, JPY the strongest of the majors; global equities up strongly to a record high; global rates lower