Kiwi Rises Against Euro as NZ Rate Hikes Outpace Europe

New Zealand's currency is poised to gain strength against its European counterpart due to expectations that the Reserve Bank of New Zealand will outpace the European Central Bank in interest rate hikes.

According to strategists at Macquarie Bank Ltd., Westpac Banking Corp., and Canadian Imperial Bank of Commerce, the Kiwi dollar is expected to rise by as much as 3.2% against the euro over the next three months.

This prediction comes from a comparison of overnight index swaps, which show that the Reserve Bank of New Zealand will increase its benchmark rate by more than one percentage point in the coming year, compared to around 75 basis points of tightening expected from the European Central Bank.