RBNZ Caution Weighs on New Zealand Dollar

The New Zealand dollar took a hit after the Reserve Bank of New Zealand (RBNZ) delivered its second consecutive 25 basis point interest rate hike.

RBNZ Governor Anna Breman emphasized that while further hikes are likely, their timing is uncertain due to factors such as new information affecting the medium-term inflation outlook.

The RBNZ's cautious guidance has dampened expectations for a faster pace of tightening, which had been fueled by rising energy prices over the summer.

Market expectations for another hike in October have fallen from 65% to around 36%, and the updated policy rate projections remain largely unchanged.