In January 2025, New Zealand’s Building Consents rose by 2.6% compared to December, following a previous 5.6% decline. Year-on-year, however, there was a decrease of 7.2%.
The NZD/USD exchange rate has been more affected by global events, particularly recent announcements from Trump, rather than local economic data. At present, the NZD/USD is approximately 0.5618.
Construction Sector Trends
This latest rise in New Zealand’s building consents follows a sharp drop in the previous month, reflecting some recovery in the construction sector. The annual decline of 7.2%, however, shows wider weaknesses that have persisted despite the monthly gain. Housing demand, borrowing costs, and developer sentiment will continue to shape upcoming figures, with broader economic conditions influencing whether this month’s improvement is temporary or the beginning of a more sustained trend.
At the same time, the New Zealand dollar has largely moved in response to political developments abroad rather than domestic data. Recent comments from Trump have taken precedence over local economic figures, reinforcing the idea that external forces are playing a larger role in shaping exchange rate movements. The NZD/USD currently stands near 0.5618, a level that reflects these ongoing pressures.
For those analysing derivatives, keeping close watch on external political factors remains key. Market reactions to announcements from Trump have shown they can directly impact movements in the pair, overriding economic indicators from New Zealand. Any further developments in this area are likely to continue steering momentum.
Impact Of Geopolitical Events
Although domestic construction data has shown a short-term rebound, the yearly decline hints at underlying softness. This divergence between monthly and annual figures suggests that while the sector may see intermittent improvements, the long-term picture remains uncertain. Exchange rate volatility, particularly from political triggers, adds another layer of complexity, reinforcing the need for a broader view when evaluating near-term moves.
Staying reactive to geopolitical updates, while not losing sight of local conditions, is essential. The strength of the NZD has already shown sensitivity to external shifts, and this pattern is unlikely to change in the coming weeks. Careful monitoring of the next statements from Trump, alongside any adjustments in investor sentiment, will be required to anticipate further fluctuations.
