Kiwi Reaches 2½-Month High on Weakening US Dollar
The New Zealand dollar has reached its highest level in over two months, trading at $0.590. This surge comes as the US dollar weakens due to reduced expectations for a Federal Reserve rate hike following an unexpectedly low US retail sales report.
Traders have trimmed their bets on the Fed raising interest rates next month, which has sent the greenback lower. The kiwi is also supported by expectations that the Reserve Bank of New Zealand will deliver another quarter-point rate increase next month.
However, a string of weak economic data has raised questions about how much further the RBNZ can continue tightening policy. Ongoing tensions in the Middle East are also keeping investors cautious, with fresh Israeli attacks on Tehran-backed Hezbollah in Lebanon and threats of additional US sanctions on Iran clouding the prospects of an imminent peace deal.