The New Zealand dollar hovered at $0.56 on Thursday, following three consecutive sessions of gains. The currency benefited from a soft reading on core U.S. inflation, which led to a pullback in the U.S. dollar and Treasury yields. Additionally, reports suggesting that aides to President-elect Donald Trump may encourage him to adopt a more strategic approach to imposing trade tariffs provided some relief to the New Zealand dollar. The Kiwi also found support from stronger-than-expected trade data from China, along with Beijing's efforts to stabilize the Yuan. However, the NZD's gains remained capped by the dovish outlook from the Reserve Bank of New Zealand. Investors are still wagering the RBNZ will cut its 4.25% cash rate by 50bps in February, as the country’s economy remained weak. On the economic data front, the annual food inflation in New Zealand rose to 1.5% in December, the highest in ten months, up from 1.3% in November.
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