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VT 
Impact Of US-China Relations On NZD
The New Zealand Dollar’s valuation is linked to the country’s economic health, with factors such as Chinese economic performance, dairy prices, and Reserve Bank of New Zealand policies impacting its movement. Investor sentiment and market risk perceptions also play roles in the NZD’s valuation.
As of October 24, 2025, we see the NZD/USD pair trading around 0.6120, a notable change from the 0.5750 level seen when those past events were unfolding. The immediate focus is now on the US dollar’s strength, as the most recent US CPI data for September 2025 came in at 3.5%, slightly above expectations. This suggests the Federal Reserve may maintain its restrictive monetary policy, which could cap gains for the Kiwi in the near term.
The nature of US-China relations has evolved significantly since we were monitoring specific meetings between Trump and Xi. Today, the tensions are less about direct tariffs and more focused on technological competition and securing supply chains. While relations are currently stable, any unexpected flare-up in rhetoric could still sour market sentiment and weaken a China-proxy currency like the New Zealand dollar.
Political And Economic Influences On The NZDUSD
We are not facing the kind of extended government shutdown that was a concern in the past. Congress passed a continuing resolution last month, but another funding deadline looms in early December 2025. Derivative traders should be mindful that political gridlock could re-emerge, creating sudden volatility and potentially undermining the US dollar.
On the New Zealand side, the Reserve Bank of New Zealand (RBNZ) is holding its official cash rate steady at 5.5% amid signs of a slowing domestic economy. This contrasts with the US Fed’s more hawkish stance, a rate differential that tends to favor the greenback. However, providing some support for the Kiwi, global dairy prices have shown a modest recovery in recent auctions, climbing 1.8% in the latest event.
Given these opposing forces, traders should prepare for continued range-bound movement with potential for sharp, data-driven spikes in volatility. We believe options strategies, such as buying straddles ahead of the next major US employment or inflation report, could be effective to play potential breakouts. For those anticipating sideways movement, selling puts below recent support around 0.6050 might be a viable strategy to collect premium.
