Kiwi Surges on Hawkish RBNZ Tone Ahead of Rate Hike Decision

The New Zealand Dollar (NZD) has strengthened against the US Dollar (USD), reaching around 0.5960 in early European trading hours on Friday.

This move comes as a result of a hawkish tone from the Reserve Bank of New Zealand (RBNZ), which is expected to hike rates by 25 basis points (bps) to 2.75% at its upcoming September policy meeting, with two-thirds seeing at least one more rate increase this year, taking the Official Cash Rate (OCR) to 3.0% or higher by December.

A Reuters poll surveyed between August 20 and 27 showed that 90% of economists expect a 25bps hike, while Federal Reserve Chair Kevin Warsh's speech at Jackson Hole could offer fresh clues on US interest rates, potentially influencing the pair in the near term.