USD Slides on 2026 Cut Bets; Singapore GDP Signals Asian Resilience

The US Dollar (USD) remains on the defensive as traders price in an extended dovetail in Federal Reserve policy into 2026, triggering a relief rally across risk-sensitive currencies. Meanwhile, key economic data from Asia points to an unexpected resilience in global trade, underpinned by the artificial intelligence boom.

Forex Markets: Kiwi Rebound

The NZD/USD pair successfully halted a five-day losing streak, reclaiming the 0.5760 handle during Asian trading hours. The move is primarily driven by broad-based Greenback weakness rather than domestic New Zealand fundamentals. Markets are now positioning for at least two additional Fed rate cuts in 2026, narrowing the yield advantage that has supported the dollar for much of the past year.

Macro Focus: Singapore's AI-Led Boom

Singapore, often viewed as a bellwether for global trade health, delivered a strong fourth-quarter performance.

This growth is heavily skewed toward the electronics sector, specifically semiconductor and server demand driven by the AI cycle. This data challenges the narrative that looming US tariffs will immediately cripple Asian manufacturing. Instead, supply chains appear to be front-loading activity and benefiting from structural tech demand, providing a floor for Asian currencies and the broader Emerging Market complex.