New Zealand Dollar Moves Lower
The New Zealand dollar fell to around $0.570 on Tuesday, its lowest level since July 8, as hawkish Federal Reserve commentary kept the US dollar firm. Chicago Fed President Austan Goolsbee and St. Louis Fed President Alberto Musalem indicated that further rate increases may be needed, citing persistent supply shocks and inflation remaining above the Fed’s target. The kiwi has also remained under pressure since the Reserve Bank of New Zealand raised its cash rate earlier this month while signalling that further tightening would be gradual. However, markets continue to price in another rate hike in October, with the recent surge in oil prices adding to upside risks to inflation. Meanwhile, traders are looking to a US-China summit later this week for signs of progress in relations between the world’s two largest economies. A positive outcome could lift global risk appetite and lend support to the kiwi, given New Zealand’s strong trade ties with China.
570 on Tuesday, its lowest level since July 8, as hawkish Federal Reserve commentary kept the US dollar firm. Chicago Fed President Austan Goolsbee and St. Louis Fed President Alberto Musalem indicated that further rate increases may be needed, citing persistent supply shocks and inflation remaining above the Fed’s target. The kiwi has also remained under pressure since the Reserve Bank of New Zealand raised its cash rate earlier this month while signalling that further tightening would be gradual.
However, markets continue to price in another rate hike in October, with the recent surge in oil prices adding to upside risks to inflation. Meanwhile, traders are looking to a US-China summit later this week for signs of progress in relations between the world’s two largest economies. A positive outcome could lift global risk appetite and lend support to the kiwi, given New Zealand’s strong trade ties with China.