NZD/USD softens below 0.5650 amid hopes of US shutdown end

• NZD/USD weakens to around 0.5640 in Tuesday's Asian session. 
• NZ two-year inflation expectations arrived at 2.28% QoQ in Q4. 
• Majority of the US Senate passed legislation to reopen the federal government. 

The NZD/USD pair loses traction near 0.5640 during the Asian trading hours on Tuesday. The New Zealand Dollar (NZD) softens against the US Dollar (USD) after the Reserve Bank of New Zealand's (RBNZ) latest monetary conditions survey. Traders will keep an eye on the US ADP Employment Change weekly report later on Tuesday.

Data released by the RBNZ on Tuesday revealed that New Zealand's two-year inflation expectation, seen as the time frame when RBNZ policy action will filter through to prices, was unchanged at 2.28% in Q4 2025, compared to 2.28% seen in Q3. 

Meanwhile, the NZ average one-year inflation expectations rose to 2.39% in Q4 versus  2.37% prior. The Kiwi remains weak against the USD in an immediate reaction to the RBNZ Inflation Expectations data. 

The Senate has voted to approve the bill to end the government shutdown, as expected. The bill will head to the House of Representatives. If it passes in both chambers of Congress, it will head to US President Donald Trump to be signed into law. 

Trump on Monday voiced support for a bipartisan agreement to end the US shutdown, a significant step that makes it likely the government will reopen within days. Hopes of an end to the longest US government shutdown in history could provide some support to the Greenback and act as a headwind for the pair. 

If the shutdown is lifted, the attention will shift to the US economic data, especially the US Nonfarm Payrolls (NFP) report, which has not been published since government operations ground to a halt more than a month ago. Any signs of weakness in the US labour market could exert some selling pressure on the USD and help limit the pair's losses in the near term.