The New Zealand dollar reached $0.569, nearing a one-month high, as traders anticipate further interest rate hikes from the Reserve Bank of New Zealand (RBNZ). The currency has been supported by expectations of tighter monetary policy, despite a slight easing of inflation in the third quarter.
Analysts predict that inflation will rise again, potentially exceeding 4% in the fourth quarter and staying above the RBNZ’s 1-3% target range longer than previously expected. Rising energy prices due to Middle East tensions have reinforced this outlook.
Markets are nearly certain that the RBNZ will raise rates next week for the third time, pushing the Official Cash Rate (OCR) to 3.0%. Some economists forecast the OCR could climb to 3.75% by early next year or peak at 4% in the second half of 2027.
The New Zealand dollar has gained 0.7% this week, marking its second straight week of advances.