Kiwi Falls Amid Dovish Surprise, Warsh's Focus on Price Stability

The New Zealand Dollar (NZD) continues to trade under selling pressure against the US Dollar (USD), despite a stronger-than-expected Gross Domestic Product (GDP) data release. The NZD/USD pair fell to near 0.5725 during the early Asian session on Thursday, following the GDP growth figure of 0.2% quarter-on-quarter in the second quarter of 2026.

This comes as a surprise given that the data exceeded expectations, with a 2.6% annual increase versus 1.7% in Q1 and beating the estimated 2.3% growth. However, the crisis in the Middle East weighed on the economy, leading to slower growth in Q2.

The US Federal Reserve (Fed) raised its benchmark interest rate by 25 basis points (bps) to the target range of 3.75% to 4.00%, following a press conference where Fed Chairman Kevin Warsh emphasized the focus on price stability and fighting inflation.