Australia and New Zealand Weekly

The AUD has appreciated significantly due to a global pivot away from the USD, which may independently lower imported inflation in Australia. Meanwhile, New Zealand's economic recovery is picking up speed, prompting expectations for an RBNZ tightening cycle starting in late 2026.

Key Takeaways

• 1.The AUD appreciation (up 10% on TWI since early 2025) is acting as an independent shock that could dampen imported inflation more than current interest rate paths imply.
• 2.New Zealand's economy is gaining momentum, with GDP growth for 2026 revised upward to 3.3% as activity broadens into construction and services.
• 3.A global 'de-dollarisation' pivot is occurring, where investors are reallocating out of USD assets or hedging exchange exposure due to geopolitical risks and AI-related uncertainty.

Table of Contents

• Economic Insight
• The Week That Was
• Focus on New Zealand
• Data Previews
• For the week ahead
• Looking further ahead

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