The events calendar in New Zealand for the past week was empty; there was no new data that could change the outlook for the kiwi's exchange rate or the potential adjustment to future actions by the Reserve Bank of New Zealand. There is a risk of renewed inflation growth after it rose in the third quarter from 2.7% YoY to 3.0%, but forecasts for the fourth quarter are quite moderate, with ANZ Bank expecting a decline from 3.0% to 2.9% YoY, and the RBNZ has no need for additional adjustments.

From the perspective of New Zealand's economic recovery after a prolonged crisis, which, among other things, has led to negative GDP figures for five consecutive quarters, there is a positive trend in external trade. Imports have stabilized, exports are growing, especially over the last year, allowing for a surplus of 400 million NZD in September, the highest figure since 2020.

Imports remain weak due to weak domestic demand. The RBNZ will continue its monetary easing policy to restore the economy, but is unlikely to rush, as the inflation situation remains unclear — even fourth-quarter forecast improvements require confirmation. Analysts from regional banks ANZ and BNZ believe that the RBNZ will lower the rate by only 25 basis points in November and will wait for new data.

Overall, we note that markets already price in the anticipated rate cut in November, and the broader economic weakness does not allow the kiwi to strengthen. Only after new data emerges can the forecast be revisited.

The calculated price remains below the long-term average, and there are currently no signs of an upward reversal.

NZD/USD is correcting upwards from the low set on October 14 at 0.5677, but the rise is quite weak, as the kiwi has not even reached the technical level of 0.5780 (23.6% retracement of the decline in the second half of the year), and the probability of continued growth is low. We expect the decline to resume after the correction is complete, especially if global risk appetite continues to diminish. A positive impulse could come from a successful conclusion of U.S.-China trade negotiations. However, we assess the likelihood of the parties reaching a compromise solution as low, given that the differences in their approaches are fundamental in nature, and any potential agreement would likely be limited in scope at best.