Kiwi Dollar Climbs as Fed Holds Rates, NZ Business Confidence Soars

The New Zealand dollar strengthened against its US counterpart after the Federal Reserve's decision to keep interest rates steady. The greenback softened following the Fed's move, which was seen as a sign that the central bank is prioritizing economic growth over inflation.

Domestically, business confidence in New Zealand rose significantly, according to the ANZ Business Confidence Index. The index jumped to 56.1 in July from 36.6 in June, indicating a more optimistic outlook for businesses. However, sentiment weakened towards the end of the month due to renewed fighting in the Middle East.

The Reserve Bank of New Zealand is still expected to raise its cash rate at its September meeting following higher-than-expected inflation data last week.