The New Zealand dollar hovered around $0.574, near its weakest level since early December, as expectations for near-term interest rate hikes remained low. Recent economic data suggest that activity is gradually recovering, but not strongly enough to justify higher interest rates. Market pricing indicates almost no chance of a rate hike at the Reserve Bank of New Zealand’s February meeting, with only a small probability of a move until at least September. While the central bank has signaled that its easing cycle likely ended last year after a cumulative 225 bps of rate cuts, it has also pushed back against expectations for imminent tightening. Attention now turns to fourth-quarter CPI data due next week, which will provide more clues on the RBNZ’s policy direction. Externally, the kiwi dollar was also pressured by a rebound in the US dollar after inflation data came in broadly in line with forecasts, reinforcing the case for the Federal Reserve to keep rates steady later this month.