Kiwi climbs to 4-mth high as inflation figures loom

The New Zealand dollar climbed above 59 US cents for the first time since September ahead of Statistics New Zealand’s December quarter consumers price index, which his expected to show the annual pace of inflation stayed at 3% as markets increasingly price in a rate hike later this year by the Reserve Bank.

The local currency was buoyed by calmer global markets after US President Donald Tump backed away from threatening tariffs in his pursuit of adding Greenland to the republic, striking a security framework with NATO secretary-general Mark Rutte at the World Economic Forum in Davos.

Stocks on the both sides of the Atlantic gained, with 3M leading the Dow Jones Industrial Average higher as the Post-it notes maker clawed back losses from earlier this week, while the tech-heavy Nasdaq Composite was buoyed by upbeat views on artificial intelligence from the likes of Nvidia and Anthropic.

Meanwhile, corporate earnings season continued with Proctor & Gamble advancing as higher prices helped lift its revenue, while GE Aerospace’s growing sales and static margins disappointed elevated expectations. Chipmaker Intel nudged higher ahead of its result after the bell.

Reviving risk appetite

The kiwi dollar climbed to 59.07 US cents at 7am in Auckland from 58.61 cents yesterday as investors recovered their appetite for riskier assets after US President Donald Trump’s security framework for putting US land bases in Greenland quelled the earlier turmoil in markets.

The local currency has been gaining against most of its major trading partners of late, with markets fully pricing in a quarter-point rate hike by the Reserve Bank in October.

Stats NZ releases the December quarter CPI figures today, which are expected to show the annual pace of inflation stayed at 3% in the period, unchanged from the September quarter and ahead of the 2.7% forecast by the Reserve Bank.

“The breakdown matters a great deal for the policy outlook, and the data will appear less alarming if core inflation measures are better behaved,” Bank of New Zealand senior markets economist Jason Wong said in a note. “The NZ dollar has been a notable beneficiary of higher risk appetite and it has pushed up just over 59 US cents, taking its year-to date gain to 2.6%, the best of the majors.”

Calmer times

The backdown on tariff threats from the White House buoyed stock markets for a second day, with the Dow Jones Industrial Average up 1.1% in late trading, with 3M leading the blue-chip index as it clawed back losses earlier this week when warning of a US$40 million hit from any new import levies.

The tech-heavy Nasdaq gained 1.2%, with the AI sector finding favour after Nvidia chief Jensen Huang’s comments at the World Economic Forum in Davos revived optimism about the burgeoning technology, while Claude-maker Anthropic reportedly more than doubled its revenue run rate in 2025 to US$9 billion

Consumer goods firm Proctor & Gamble gained 3% in late trading after price rises offset smaller volumes as the company lifted quarterly revenue, while GE Aerospace tumbled 5.7% as its revenue growth fell short of elevated expectations from analysts. Chipmaker Intel gained ahead of its quarterly update after trading closes.

Abbot Laboratories tumbled as quarterly revenue missed analysts’ forecasts, with its unit that makes baby formula posting an 8.9% decline in sales amid smaller volumes and price cuts aimed at stoking demand. New Zealand’s The a2 Milk Co is due to report its first-half result on Feb 16.

Across the Atlantic, the UK’s FTSE 100 increased 0.1% and France’s CAC 40 rose 1%, while Germany’s DAX 30 climbed 1.2%, buoyed by Thyssenkrupp outlining a substantial Canadian military contract.

The mood in the antipodes is set to be more muted, with Australian futures pointing to a 0.1% dip for the S&P/ASX 200 index when trading opens across the Tasman. Stronger than expected jobs growth stoked expectations for the Reserve Bank of Australia to raise its target cash rate as early as next month.

The kiwi dollar increased to 86.36 Australian cents at 7am in Auckland from 86.11 cents yesterday.

Reporting by Paul McBeth. Image from Markus Spiske on Unsplash.

This story has been updated to correct a typo.