New Zealand Dollar Extends Pullback

The New Zealand dollar edged lower to around $0.602, extending its pullback from a seven-month high in the previous session, as the US dollar regained strength. The greenback rebounded after President Donald Trump nominated Kevin Warsh as Fed chair, a move markets view as hawkish and less supportive of aggressive rate cuts. Meanwhile, investors continued to assess the Reserve Bank of New Zealand’s policy outlook, as upbeat recent data, particularly an upside surprise in inflation, reinforced expectations that the central bank may begin tightening later this year, though July is seen as the earliest window for a move. Attention now turns to this week’s quarterly labor market data, with employment forecast to rise 0.3% q/q and the unemployment rate expected to hold at 5.3%. Policymakers meet on February 18, marking the first decision under new Governor Anna Breman, who is expected to outline her policy vision.