Kiwi Hits 2-Month Low Amid US Dollar Strength

The New Zealand dollar has reached its lowest level in two months, dipping to around $0.576. This decline comes as the US dollar strengthens amid expectations for the Federal Reserve to increase interest rates this week.

Not only is the kiwi facing pressure from the strong US dollar, but it's also being impacted by weak domestic demand. Electronic card spending in New Zealand fell 0.9% in August, partly due to high petrol prices and borrowing costs.

The market is now looking ahead to the release of second-quarter GDP data on Thursday, with analysts predicting only modest growth. Meanwhile, markets are pricing in a 60% chance that the Reserve Bank will deliver another quarter-point rate hike at its October meeting.