NZ dollar holds firm near $0.593 as US yields retreat

The New Zealand dollar hovered around $0.593 after rising 1% in the previous session to a two-and-a-half-month high, as the US dollar tumbled and Treasury yields retreated from multi-year highs.

The U.S.

Treasury announced plans to double its buybacks of longer-dated government debt, a move aimed at improving liquidity and stabilizing the bond market.

The resulting decline in US yields helped ease pressure on risk-sensitive currencies despite ongoing uncertainty surrounding the Middle East conflict.

Meanwhile, minutes from the Federal Reserve’s July meeting showed that policymakers remained concerned about persistent inflation, with several officials open to further interest-rate hikes.

This could provide some support for the greenback and limit the kiwi's upside.

Still, the kiwi remains supported by expectations of another rate hike from the Reserve Bank of New Zealand in September.