12 Dec 2024

• NZD/USD rebounds from a two-year low of 0.5761, which was recorded on Wednesday.
• The New Zealand Dollar may struggle as China may allow the Yuan to depreciate further in 2025
• The US Dollar remains subdued due to rising odds of a Fed rate cut next week
• NZD/USD has reversed its two-day decline after hitting a two-year low of 0.5761 on Wednesday, and is currently trading at approximately 0.5820 during the early hours of Thursday in Europe. Nevertheless, the New Zealand Dollar (NZD) continues to face downward pressure due to indications that Beijing may permit the Yuan to depreciate further in the coming year to mitigate the effects of US tariffs. A weaker Yuan typically exerts a negative influence on the NZD, given New Zealand's significant dependence on China as a primary export destination.
  
  Moreover, market participants are bracing for a notable interest rate reduction of 50 basis points (bps) by the Reserve Bank of New Zealand (RBNZ) in its upcoming February meeting, which is further exacerbating the decline of the New Zealand Dollar (NZD).
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