The People’s Bank Of China The People’s Bank of China set the USD/CNY reference rate at 7.0019, up slightly from 7.0014. In December, Australia’s unemployment rate decreased to 4.1%, lower than the predicted 4.4%. The EUR/USD dipped below 1.1700 as the US dollar fluctuated. It returned to this level after two days of gains, with attention shifting to US labor market and GDP data. GBP/USD stayed steady above 1.3400, but caution is advised ahead of US economic data. Gold prices fell below $4,800, down from a high of $4,888 due to tariff threat decisions. On Wednesday, markets rebounded, with stocks, bonds, and cryptocurrencies all gaining. However, Monero dropped below $500, marking a 38% decline from its high of $800 last week. New Zealand’s Economic Outlook New Zealand’s electronic card retail sales for December 2025 fell by 0.5% compared to last year, a significant drop from the previous 1.6% growth. This signals waning consumer demand, raising concerns for the economy. This trend suggests the New Zealand dollar (NZD) may face challenges in the weeks ahead. The decline in spending puts pressure on the Reserve Bank of New Zealand (RBNZ). After multiple rate hikes in 2024 to combat inflation that peaked near 7.3%, this latest data gives the RBNZ strong reasons to reconsider. The market may now begin to anticipate an interest rate cut later this year instead of another increase. Given this situation, buying put options on the NZD/USD is a simple way to prepare for a potential decline. This strategy allows you to profit from a falling NZ dollar while limiting your risk to the premium paid. Look for a drop below the recent lows we saw in late 2025, around the 0.5800 level, as an important technical signal. It’s also essential to note the contrast with Australia’s better economic data from last month. Australia’s unemployment rate dropped to 4.1% in December 2025, maintaining a relatively hawkish outlook for the Reserve Bank of Australia. This difference supports a long AUD/NZD position, which can be pursued through futures or options to capitalize on New Zealand’s economic weaknesses. Remember that the kiwi briefly gained strength in December 2025 due to easing US tariff news, highlighting its sensitivity to global risk sentiment. Traders should also explore strategies that benefit from increased volatility, especially before crucial US data releases. Any global risk-off events could heighten the downside pressure on the NZD given its weak domestic fundamentals. Create your live VT Markets account and start trading now.

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