Markets relax after the Fed cut rates, seeing two more cuts next year. Australia’s unemployment rate holds, but a drop in jobs suggests softness. And New Zealand growth expectations get a boost.
In our Deep-Dive interview, ANZ Head of FX Research Mahjabeen Zaman previews some of the more interesting drivers of FX markets in 2026.
5 things to know in 5 minutes:
Markets were sanguine after the Fed cut the Fed Funds Rate yesterday by 25 basis points, as expected. Traders still expect two more cuts next year, says ANZ’s Head of G3 Economics Brian Martin.
Australia’s unemployment rate remained at 4.3% in November, as expected. But ANZ Economist Aaron Luk says a drop in employment of 21,000 in the month surprised the market, which expected a 20,000 jump.
Aaron says the labour market still appears slightly stronger than the RBA was forecasting and both hike and cut expectations may have been tempered by the data.
The final partial indicator for New Zealand Q3 GDP, business indicators, continued the ‘green shoots’ story in the economy. ANZ Senior Economist Matt Galt says manufacturing and services showed some strength.
The NZ dollar has also been performing strongly as wholesale interest rates rose. ANZ Senior Strategist David Croy says the Kiwi was the top performing G10 currency since early November.
Cheers,
Bernard.
Catch you next week as we look ahead to a Bank of Japan rates decision.
