NZD/USD climbs close to 0.5800 after release of NZIER Q4 Business Confidence

NZD/USD Extends Rally Amid Strong Business Confidence

The NZD/USD currency pair advanced for a second consecutive session, hovering near 0.5780 during Tuesday’s Asian trading hours. This upward movement comes as the New Zealand Dollar finds support following a notable rise in domestic business confidence. According to the New Zealand Institute of Economic Research’s Quarterly Survey of Business Opinion, business confidence surged to 48% in the fourth quarter of 2025, marking its highest point since March 2014 and a significant jump from 18% in the previous quarter.

Principal economist Christina Leung from NZIER highlighted that the survey results indicate lower interest rates are beginning to positively impact the economy, with signs of a strengthening recovery. Leung also noted, as reported by Reuters, that the improved outlook was seen across various industries and regions.

Despite these gains, further advances in NZD/USD may be limited as the US Dollar strengthens ahead of the release of December’s Consumer Price Index (CPI) data later today. This data could provide investors with new insights into the Federal Reserve’s future policy direction.

Currently, markets anticipate that the Federal Reserve will implement two interest rate cuts this year, beginning in June. However, if inflation data exceeds expectations, it could dampen hopes for policy easing. The weaker-than-expected Nonfarm Payrolls (NFP) report for December has contributed to a more dovish outlook for the Fed. According to the CME Group’s FedWatch tool, there is about a 95% chance that the central bank will leave rates unchanged at its January 27–28 meeting.

Market participants remain wary due to increasing concerns about the Federal Reserve’s autonomy. Federal prosecutors have reportedly threatened to indict Fed Chair Jerome Powell over statements made to Congress regarding a building renovation, raising questions about the central bank’s independence. Additionally, investors are closely watching for a US Supreme Court decision on the legality of former President Donald Trump’s tariff measures, expected on Wednesday.