NZD: NZD/USD-Stalls Toward 0.6050 On First Attempt, Dips To Be Supported

NZGBs closed slightly mixed, with a flattening bias after thin holiday trading.

• (MT Newswires) “New Zealand's construction industry is set for a 3.3% contraction in 2025 amid rising debt, declining building permits, labour shortages, and material costs, according to Research and Markets' report on Dec. 24.”
• “The sector is expected to recover from 2026 to 2029, growing at an average annual rate of 4.4%, driven by increased investment in transport, health, and education infrastructure, as well as government commitments to renewable energy and net-zero emissions targets, the report said.”
• (Financial Express) “India and New Zealand have agreed to deepen economic partnership by concluding negotiations on a Financial Services Annexe as part of the newly finalised Free Trade Agreement (FTA).”
• RBNZ-dated OIS pricing is little changed across meetings. No tightening is priced for February, while October 2026 assigns 24bps. In early December, the market had assigned ~50bps (see chart).
• Tomorrow, the local calendar will be empty until the Cotality Home Value data is updatedon January 1.

After Friday’s 10.3% jump in silver prices, they reached a new record high at $84.008, breaking above $84.00 briefly, early in today’s APAC session. They then fell to $75.197 in what looked like some profit taking following US President Trump’s positive comments regarding progress on a Ukraine peace deal, which eases geopolitical tensions. However, it recovered to breach $80 again and is currently up 0.7% today to $79.90. Thin holiday-related volumes are likely to cause volatility.

• Gold is still down on the day after falling to $4472.46 early in trading. It is currently down 0.5% to $4511.8. The US dollar index is slightly softer while the US 2-year yield is marginally higher.
• Precious metals have found support from lower US rate expectations, Fed independence concerns, rising government debt and geopolitical/trade issues driving inflows but silver has also been boosted by strong physical demand and thus a tight market. This has encouraged speculators and now there is uncertainty over how paper purchases will be covered by the physical metal.
• Bloomberg reported that silver’s 14-day relative strength index (RSI) is around 10 points into overbought territory. It also cited Elon Musk’s concern regarding the 40% rise in prices this month as it is an important input into the production of certain items.
• Equities are mixed with the Hang Seng up 0.3%, S&P e-mini flat but ASX down 0.4%. Commodities are generally stronger with WTI +1.1% to $57.34/bbl, copper +1.0% and iron ore at $106/t.
• Later US November pending home sales and December Dallas Fed manufacturing print.

Despite the yen giving up most of its gains against the greenback following the publication of the December BoJ summary of opinions (SOO), it has outperformed most of the G10 during Monday’s APAC session. The yen strengthened with the release of the BoJ’s December meeting summary of opinions, which suggested that there are likely to be further rate hikes but it is not on a preset course. It noted that negative real rates are putting downward pressure on the yen and so additional tightening may help to support the currency.

• The BBDXY USD index is off its intraday low of 119.80 to be down slightly today.
• USDJPY fell to 156.06 following the SOO but then rose to around 156.50. The pair is now down 0.1% to 156.39 on Monday.
• Generally G10 currency moves have been muted given limited new information in holiday-affected trading. AUDUSD’s 0.2% rise to 0.6722 was one of the larger moves helped by stronger China/HK equities and commodity prices. It reached a high of 0.6727 after a low of 0.6700. Risk-sensitive Aussie was likely also helped by positive talks between Presidents Trump and Zelenskyy.
• Aussie and kiwi continued to diverge given the differing monetary policy positions. NZD is underperforming with NZDUSD down 0.1% to 0.5832 leaving AUDNZD up 0.2% to 1.1535, close to the intraday high and a new December peak.
• European currencies are generally close to flat with EURUSD at 1.1774 after a high of 1.1786 and GBPUSD 1.3508 off the intraday low at 1.3485.
• Later US November pending home sales and December Dallas Fed manufacturing print.