What You Need to Know – November 26
On Wednesday, November 26th, the New Zealand dollar (NZD) and the Australian dollar (AUD) saw an uptick as the markets responded to policy changes from the Reserve Bank of New Zealand (RBNZ) and fresh inflation data from Australia. As the day progresses, the U.S. will also release data on September’s durable goods orders and the weekly new jobless claims, ahead of the Thanksgiving holiday.
Currency Movements
This week, the U.S. dollar (USD) is showing weakness against major currencies, especially the NZD, which recently recorded a notable rise.
The RBNZ announced a cut in its policy rate by 25 basis points to 2.25%, an expected move. Their forecasts suggest that this rate will hold steady until about March 2026. During a post-announcement conference, RBNZ Governor Christian Hawkesby communicated a balanced view of risk and maintained that the main forecast hinges on the cash rate remaining unchanged until 2026. As a result, the New Zealand dollar has gained bullish momentum, trading just below 0.5700, marking an increase of over 1% for the day.
Turning to Australia, the inflation rate, as indicated by the Consumer Price Index (CPI), increased to 3.8% in October from 3.5% in September, surpassing the anticipated figure of 3.6%. The strong inflation data is benefiting the Australian dollar, which last traded up more than 0.5% for the day at 0.6505.
U.S. Economic Outlook
The U.S. dollar continues to experience some downward pressure as the day unfolds, with the dollar index dipping towards 99.50 after a decline of approximately 0.4% on Tuesday. According to a report from Automatic Data Processing (ADP), private sector employers have been reducing jobs, cutting an average of 13,500 positions weekly over the last month, hinting at a troubling labor market scenario. On the brighter side, major U.S. stock indexes saw remarkable gains on Tuesday, driven by increasing expectations for potential rate cuts by the Federal Reserve. Early Wednesday saw stock index futures rise between 0.3% to 0.5%.
The GBP/USD pair climbed about 0.5% on Tuesday, benefiting from the weakening of the U.S. dollar, and continued to rise toward 1.3200 in early European trading on Wednesday. Later today, UK Chancellor of the Exchequer Rachel Reeves is set to present the Autumn Budget.
The euro advanced toward 1.1600 on Wednesday, continuing to build on its Tuesday gains and reaching a weekly high.
As for USD/JPY, it found some support after Tuesday’s drop, maintaining a slight daily increase above 156.00 in the European morning hours.
Gold (XAU/USD) ended Tuesday with little change, showing no decisive movement and remains slightly elevated around $4,150 for the day.
