US dollars per New Zealand dollar

IBISWorld forecasts the US$/NZ$ exchange rate to decrease by 1.6% in 2025-26, to $0.5847. Between April 2025 and October 2025, the NZ Reserve Bank cut the official cash rate (OCR) by 125 basis points, including a 50-basis-point decline on the 8th of October. In comparison, the US Federal Funds Rate has only fallen by 25 basis points over the same period. The exchange rate was somewhat resilient in Q2 2025, expanding by 5.3% between March and June. However, as the OCR continued to trend downwards in Q3 and early Q4, the further divergence between the OCR and US Federal Funds Rate placed downwards pressure on the US$/NZ$ exchange rate. Despite this, most major banks in New Zealand expect the exchange rate to rebound throughout the remainder of the 2025-26 financial year, limiting overall declines over the course of the year, due to anticipated broad US dollar weakness and New Zealand's improving domestic macroeconomic outlook resulting from the RBNZ's expansionary monetary policy.

In December 2020, the US Federal Reserve extended its temporary currency swap agreements with nine central banks until December 2021 to ease the pressure on demand for USD liquidity. The nine central banks were Australia, Brazil, Denmark, South Korea, Mexico, Norway, New Zealand, Singapore and Sweden. The US Federal Reserve's move to increase the supply of US dollars supported a rise in the US$/NZ$ exchange rate in 2021-22. Furthermore, New Zealand's relative success in containing COVID-19 led to the exchange rate rising over 2020-21 and 2021-22. High prices for New Zealand's key agricultural exports also helped support currency appreciation against the US dollar over this time period.

Since 2022-23, the New Zealand dollar has consistently depreciated against the US dollar. Initially, New Zealand experienced weak GDP growth and entered a shallow recession characterised by persistent inflation and subdued consumer confidence. In comparison, the US dollar strengthened as growing interest rates led to global appreciation, particularly against commodity and risk currencies, including the New Zealand dollar. In 2023-24, the exchange rate fell due to New Zealand's stagnant GDP growth. The trend was exacerbated by increased US bond yields, which attracted global capital towards US assets. Slowed demand from China, which pushed down New Zealand's export prices, combined with delayed easing signals from the RBNZ, further impacted the strength of the New Zealand Dollar throughout the year. Throughout 2024-25, the OCR fell by 175 basis points across four separate rate cuts, as domestic recession and weak growth forecasts forced the RBNZ to take measures to support the economy. In comparison, the US Federal Reserve shifted guidance to fewer rate cuts, causing the USD to remain resilient and the NZD to tumble near pandemic lows. Overall, IBISWorld forecasts the US$/NZ$ exchange rate to fall at a compound annual rate of 2.7% over the five years through 2025-26.