New Zealand Dollar Dips to 11-Week Low
The New Zealand dollar slipped to $0.570 on Wednesday, erasing the previous session’s gains to hit an eleven-week low, as the US dollar strengthened amid hawkish Federal Reserve rhetoric. Richmond Fed President Tom Barkin warned that inflationary shocks could take time to fade. His comments followed those of other Fed officials who have broadened their concerns about inflation, reinforcing expectations that further policy tightening is on the horizon. This outweighed rising expectations for further tightening by the Reserve Bank of New Zealand. Markets have increased bets on a third rate hike to 3.0% at the RBNZ’s October meeting to 75%, after Governor Anna Breman warned that persistent increases in oil prices could push near-term inflation somewhat above the central bank’s latest forecast. However, her emphasis on an uneven economic recovery underscored the challenge of balancing inflation risks with still-fragile domestic growth.
570 on Wednesday, erasing the previous session’s gains to hit an eleven-week low, as the US dollar strengthened amid hawkish Federal Reserve rhetoric. Richmond Fed President Tom Barkin warned that inflationary shocks could take time to fade. His comments followed those of other Fed officials who have broadened their concerns about inflation, reinforcing expectations that further policy tightening is on the horizon. This outweighed rising expectations for further tightening by the Reserve Bank of New Zealand.
0% at the RBNZ’s October meeting to 75%, after Governor Anna Breman warned that persistent increases in oil prices could push near-term inflation somewhat above the central bank’s latest forecast. However, her emphasis on an uneven economic recovery underscored the challenge of balancing inflation risks with still-fragile domestic growth.