The New Zealand dollar traded around $0.557 on Monday, hovering at its lowest level in more than two years, pressured by a strong US dollar. The surge in the greenback followed stronger-than-expected US jobs data, which underscored the resilience of the US labor market and supported the Federal Reserve's cautious stance on rate cuts. The Kiwi was also weighed down by continued expectations that the Reserve Bank of New Zealand will cut its 4.25% cash rate by 50bps in February and further to 3% by year-end. Meanwhile, China's bolstered yuan measures, including a warning and capital control adjustments, along with strong trade data that surpassed forecasts, failed to provide lasting support for the antipodean currency. The Kiwi often serves as a liquid proxy for the yuan, given China's role as New Zealand's largest trading partner.
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