The New Zealand dollar rose to around $0.588 on Friday, ending a two-day losing streak as the US dollar fell on weak economic data that raised bets on more Federal Reserve rate cuts this year.
Latest data showed that US producer prices unexpectedly dropped by the most in five years, while retail sales growth slowed.
Domestically, markets are still wagering on a further cut of 25bps by the Reserve Bank of New Zealand later this month amid a weak economy.
However, investors suspect the central bank’s easing cycle may be nearing its end, with rates now seen bottoming at 3.0%.
Despite Friday’s rebound, the Kiwi is on track for its third consecutive weekly loss after a volatile week in which it saw gains on news of a US-China tariff deal, only to encounter selling pressure at key technical levels.