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    Concerns about New Zealand’s labour market lead to NZD/USD stabilizing around 0.5660, losing momentum

    by VT Markets
    /
    Nov 13, 2025
    In New Zealand, the job market is presenting challenges that support a cautious approach from the Reserve Bank of New Zealand (RBNZ). In the third quarter of 2025, the unemployment rate remained at 4.9%. The RBNZ has already lowered its Official Cash Rate twice this year to 4.75%, and more cuts could happen soon. Traders might want to prepare for another rate cut in early 2026, which could weaken the kiwi further.

    Complex US Situation

    In the United States, the situation is more complicated, leading to uncertainty for the US dollar. The latest Non-Farm Payrolls report from October 2025 revealed only 130,000 new jobs, which was less than expected and indicates a slowing economy. Still, with inflation at 3.5%, the Federal Reserve is balancing the fight against inflation with the need to support growth. Looking back at the period after the 2019 government shutdown, we see a similar trend: a weakening job market led to speculation about the Fed lowering rates. At that time, Fed officials warned against rushing to cut rates, similar to the sentiments we hear now. This historical context suggests the market might be too quick to expect large cuts from the Fed.

    Trading Strategies for Derivatives

    For those trading derivatives, this situation offers opportunities for strategies that can profit from either significant moves or stable conditions. Buying put options on the NZD/USD could be a simple way to prepare for a rate cut from the RBNZ while keeping risk defined. On the other hand, if you think the Fed’s caution and the RBNZ’s dovish approach will balance each other, selling volatility through strategies like an iron condor could work well, especially if the pair stays within its current range. Create your live VT Markets account and start trading now.

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