New Zealand’s unemployment rate rose to 5.4% in the fourth quarter, slightly higher than the anticipated 5.3%. This increase may affect future monetary policy decisions as the market responds to the data.<\/p>\n
The Australian dollar stabilised after data on China’s services sector. In other financial news, the price of silver climbed above $87.50 due to geopolitical tensions, while the USD\/CAD hovered near 1.3650 amid falling oil prices.<\/p>\n
The NZD\/USD remained below mid-0.6000s due to mixed employment data. The Japanese yen dropped to a nearly two-week low against the USD because of fiscal and political uncertainties. Meanwhile, WTI crude climbed past $63.50 after the US downed an Iranian drone.<\/p>\n
Key developments include EUR\/USD’s consolidation above 1.1800 ahead of Eurozone CPI data and gold’s upward trend toward $5,050, driven by rising demand as geopolitical tensions increase. Additionally, the weak performance in tech stocks has seen equities decline, while ripple also fell amid low demand.<\/p>\n
FXStreet information contains forward-looking statements with potential risks. It’s intended for informational purposes only, not as a recommendation. Market investments come with inherent risks and potential losses. Readers are advised to conduct thorough research before making investment decisions.<\/p>\n
The higher-than-expected unemployment rate for the end of 2025 is a clear signal for us. This 5.4% figure is the highest we’ve seen in over four years, marking a sharp increase from the 4.1% recorded at the end of 2024. This data puts direct pressure on the Reserve Bank of New Zealand to consider a more dovish monetary policy stance.<\/p>\n
Consequently, the New Zealand dollar is showing significant weakness, already falling below the mid-0.6000s against the US dollar. We are seeing the Kiwi test support around the 0.6040 level, a direct reaction to the market adjusting for a weaker economic outlook. This move makes shorting the currency, or buying protection against further falls, an attractive prospect.<\/p>\n
This local weakness is happening alongside a broader risk-off mood in global markets. Renewed geopolitical tensions in the Middle East are pushing investors towards safe-haven assets. We see this with gold pushing towards $5,050 an ounce and silver surging above $87.50, suggesting a flight from risk.<\/p>\n
The underperformance of other commodity-linked currencies like the Canadian dollar, which is struggling as oil prices decline, reinforces this view. Looking back at the market volatility in 2025, we saw similar patterns where fears of a global slowdown hit commodity exporters first. This broader trend supports a bearish view on currencies tied to global growth.<\/p>\n
Historically, the RBNZ has responded to such sharp rises in unemployment by easing policy to support the economy. The interest rate swaps market is already reacting, pricing in a more than 60% probability of a rate cut by the May meeting. This is a rapid shift in expectations and suggests momentum is building for a lower NZD.<\/p>\n
Given this outlook, we should consider strategies that profit from further declines or limited upside in the Kiwi dollar. Buying NZD\/USD put options with expirations in the next one to two months offers a direct way to play this expected weakness. Alternatively, selling out-of-the-money call spreads could be a way to collect premium if we believe the currency will simply stay below recent highs.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Unemployment rose in New Zealand, silver surged, yen weakened, and oil climbed amid geopolitical tensions.<\/p>\n","protected":false},"author":62,"featured_media":16995,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-40870","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/40870","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=40870"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/40870\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/16995"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=40870"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=40870"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=40870"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}