The People’s Bank Of China
The People’s Bank of China set the USD/CNY reference rate at 7.0019, a slight increase from the previous 7.0014. Australia’s unemployment rate fell to 4.1% in December, below the expected 4.4%.
The EUR/USD traded below 1.1700 following US Dollar movements. It returned to this region despite two days of advances, as focus shifted to US labour market and GDP data.
GBP/USD remained stable above 1.3400, with caution advised ahead of US macro data. Gold prices dropped to below $4,800, retreating from a high of $4,888 after tariff threat decisions.
Markets recovered on Wednesday, with stocks, bonds, and cryptocurrencies showing gains. Monero continued its decline, falling below $500, marking a 38% drop from the previous week’s high of $800.
New Zealand’s Economic Outlook
We saw the data showing New Zealand’s electronic card retail sales for December 2025 fell by 0.5% year-over-year, a sharp reversal from the previous 1.6% growth. This points to a significant cooling in consumer demand, which is a major red flag for the economy. This weakness suggests the New Zealand dollar (NZD) is facing headwinds in the coming weeks.
This drop in spending complicates the outlook for the Reserve Bank of New Zealand (RBNZ). After a series of aggressive rate hikes through 2024 to combat inflation that peaked near 7.3%, this data gives them a strong reason to pivot. Market pricing should now increasingly factor in the possibility of an interest rate cut later this year, rather than another hike.
Considering this, buying put options on the NZD/USD is a straightforward strategy to position for a potential decline. This allows for profiting from a falling kiwi dollar while capping the maximum risk at the premium paid. Look for a break below the recent lows we observed back in late 2025, around the 0.5800 level, as a key technical signal.
The contrast with Australia’s stronger economic data from last month is also important. Last year, Australia’s unemployment rate consistently trended lower, hitting 4.1% in December 2025, which has kept the Reserve Bank of Australia’s outlook relatively hawkish. This divergence supports a long AUD/NZD position, which could be implemented through futures or options to play the relative weakness of the New Zealand economy.
Remember how the kiwi briefly strengthened in December 2025 on easing US tariff news, showing its sensitivity to global risk sentiment. This means traders should also consider strategies that benefit from increased volatility, especially ahead of major US data releases. Any global risk-off event would likely amplify the downside pressure on the NZD given its weak domestic fundamentals.
