Insights 
VT 
The NZD/USD exchange rate saw a slight increase as China announced the suspension of some tariffs on US agricultural products. The New Zealand Dollar is affected by China’s trade actions, as it is New Zealand’s largest trading partner. The suspension, which affects 24% tariffs, is set to begin on November 10 and last for a year, buoying market sentiment.
Challenges in New Zealand
However, the domestic situation in New Zealand remains challenging, with the Unemployment Rate rising to 5.3% in the third quarter, the highest since 2016. Employment Change was stagnant, leading to expectations of a rate cut by the Reserve Bank of New Zealand at its November meeting. The participation rate dropped to 70.3%, with private wages rising by 0.5% quarter-on-quarter.
In the US, the USD is pressured by an unresolved budget deadlock in Washington, resulting in a partial government shutdown entering its sixth week. The ISM Services PMI showed a moderate increase to 52.4, with the labour market remaining stable. Current market projections give a 62% chance of another Federal Reserve rate cut in December.
The New Zealand Dollar was strongest against the Japanese Yen in recent changes, as displayed in the currency table. Other major currencies saw mixed results against each other. The heat map reflects these percentage changes in the currency market.
Given the current situation on November 6, 2025, the New Zealand dollar’s underlying weakness appears more significant than its temporary gains. The slight boost from China’s tariff news is likely short-lived compared to the pressure from New Zealand’s own weak labor market. The rising unemployment rate, now at 5.3%, gives the Reserve Bank of New Zealand (RBNZ) a clear reason to cut interest rates.
Strategic Considerations
We should look at positioning for a lower NZD/USD exchange rate ahead of the RBNZ meeting on November 26. Buying NZD/USD put options with a December expiration could be a strategic way to profit from the widely expected interest rate cut. This 5.3% unemployment figure continues the difficult trend we have watched develop over the past two years, as the rate has climbed steadily from under 4% back in 2023.
History shows us how sensitive the Kiwi is to these policy moves, as we saw back in August 2019 when an aggressive RBNZ rate cut sent the currency tumbling. With the market already fully pricing in a 25-basis-point cut this month, any hint of further easing in early 2026 could accelerate the decline. This reinforces the case for taking a bearish stance on the New Zealand dollar.
Although the US dollar is facing its own problems with the prolonged government shutdown, the RBNZ’s path seems much clearer. The 62% chance of a Federal Reserve rate cut in December is less certain than the near-guaranteed cut from the RBNZ. For the next few weeks, the RBNZ’s definite action is the more powerful force, suggesting the New Zealand dollar has more room to fall than the US dollar.
