NZD/USD jumps above 0.5850 as US Dollar slides further, RBNZ policy in focus

NZD/USD surges above 0.5850 as the US Dollar extends its upside.

The US Dollar plummets as investors expect Bessent to favor a more balanced tariff and taxation policy.

Investors expect the RBNZ to cut interest rates by 50 bps to 4.25% on Wednesday.

The NZD/USD pair climbs above 0.5850 in the North American session on Monday. The Kiwi pair strengthens as the US Dollar (USD) extends its correction that was driven by a selection of veteran hedge fund manager Scott Bessent as Treasury Secretary by President-elect Donald Trump. The US Dollar Index (DXY), which tracks the Greenback’s value, had a weak opening near 106.80 and extends its downside to near 106.60.

The reaction from market participants was negative for the US Dollar (USD) as Treasury yields dived after bond markets gave a warm welcome to a seasoned hedge fund manager on expectations that he would bring fiscal discipline to the economy. "Bessent is seen as an antidote to Trump's most extreme economic views, XTB’s Kathleen Brook said. She added, “Bessent favors less government spending and is expected to advocate a slow and steady approach to potentially inflationary trade tariffs.”