New Zealand's unemployment rate rises to 4½ high, Kiwi pushes higher

[Ben Graham]

The New Zealand dollar continues to have a quiet week. In the European session, NZD/USD is trading at 0.5923, up 0.37% on the day. The kiwi has been under pressure, falling 3.4% against the US dollar in July.

New Zealand's unemployment rises, job growth declines

New Zealand's employment report for Q2 was pretty much as expected, but the news wasn't good. The unemployment rate rose to 5.2% from 5.1% in Q1, below the consensus of 5.3%. This marked the highest unemployment rate since Q3 2020. Employment Change declined by 0.1%, down from a 0.1% gain in Q1 and matching the consensus. This was the third decline in four quarters.

The weak figures point to growing slack in the labor market as the economy continues to struggle. Global trade tensions remain high and New Zealand's export-reliant economy has taken a hit from softer global demand.

The Reserve Bank of New Zealand will be paying close attention to the weak job numbers, which support a rate cut in order to provide a boost to the economy. The RBNZ maintained rates in July after lowering rates at six consecutive meetings. The conditions for a rate cut at the Aug. 20 meeting seem ripe and the markets have priced in a quarter-point reduction at around 85%.

We'll get an updated look at the inflation picture on Thursday. Inflation Expectations rose to 2.3% in the second quarter, the highest in a year. This is the final tier-1 release prior to the August rate meeting.

Fed expected to cut in September

Three FOMC members will speak later today and investors will be hoping for some insights regarding the Federal Reserve's rate plans. The Fed hasn't lowered rates since December but is widely expected to hit the rate trigger at the September meeting.

NZD/USD Technical

NZDUSD 1-Day Chart, Aug. 6, 2025

• NZD/USD has pushed above resistance at 0.5902 and testing 0.5922. Next, there is resistance at 0.5944
• 0.5880 and 0.5860 are providing support

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