New Zealand Dollar Remains Under Pressure
The New Zealand dollar held around $0.567 on Thursday, hovering at an eleven-week low, as a robust US dollar keeps pressure on the kiwi. The greenback reached its strongest level in nearly two months, as stronger-than-expected PMI data fuelled concerns over inflation and strengthened expectations for more interest-rate hikes. Even before the release, several Federal Reserve officials had voiced broader concerns about persistent inflation risks, saying that rate increases are likely needed. The hawkish Fed outlook overshadowed rising expectations for further tightening by the Reserve Bank of New Zealand. Markets are currently pricing in a 75% chance the central bank will deliver a third hike in October, after Governor Anna Breman warned that sustained oil price increases could push near-term inflation 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.
567 on Thursday, hovering at an eleven-week low, as a robust US dollar keeps pressure on the kiwi. The greenback reached its strongest level in nearly two months, as stronger-than-expected PMI data fuelled concerns over inflation and strengthened expectations for more interest-rate hikes. Even before the release, several Federal Reserve officials had voiced broader concerns about persistent inflation risks, saying that rate increases are likely needed. The hawkish Fed outlook overshadowed rising expectations for further tightening by the Reserve Bank of New Zealand.
Markets are currently pricing in a 75% chance the central bank will deliver a third hike in October, after Governor Anna Breman warned that sustained oil price increases could push near-term inflation 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.