NZD/USD remains stronger near 0.6000 as New Zealand’s Q4 Retail Sales rises

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NZD/USD gains ground for the third consecutive session, trading around 0.5990 during the Asian hours on Monday.

NZD/USD steadies as New Zealand’s Retail Sales rose 0.9% QoQ in Q4 2025, beating the 0.6% forecast.
RBNZ signaled policy would stay accommodative as inflation returns to the target midpoint next year.
President Trump said that he will raise tariffs to 15% from 10% after the Court struck down his trade agenda.

NZD/USD gains ground for the third consecutive session, trading around 0.5990 during the Asian hours on Monday. The pair holds ground following the release of New Zealand’s Retail Sales, which climbed 0.9% quarter-over-quarter (QoQ) in the fourth quarter (Q4) of 2025, exceeding the market consensus of 0.6%. The previous reading was 1.9% increase. Meanwhile, Retail Sales, excluding Autos, rose 1.5% in the same period, following 1.2% increase prior.

The Reserve Bank of New Zealand (RBNZ) kept the cash rate unchanged at 2.25% last week, as expected, and signaled that policy would remain accommodative, with inflation projected to return to the midpoint of its target range over the coming year.

The NZD/USD pair also strengthens as the US Dollar (USD) weakens against its major counterparts amid persistent tariff uncertainty. Uncertainty over trade policy remains elevated after US President Donald Trump criticized the Supreme Court for blocking his use of emergency powers to implement so-called reciprocal tariffs.

According to CNBC, Trump said on Saturday that he plans to raise global tariffs to 15% from 10%. His comments followed the Court’s decision to strike down a significant portion of his trade agenda. Trump added that the new tariffs would be “effective immediately” and cautioned that further levies could be introduced.

New Zealand Dollar FAQs

What key factors drive the New Zealand Dollar?

The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.

How do decisions of the RBNZ impact the New Zealand Dollar?

The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.

How does economic data influence the value of the New Zealand Dollar?

Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.

How does broader risk sentiment impact the New Zealand Dollar?

The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.