New Zealand Dollar Falls as USD Strengthens on Fed Rate Hike Bets
The New Zealand Dollar (NZD) continues its decline against the US Dollar (USD), with NZD/USD trading around 0.5770 at the time of writing, down 0.72% on the day.
This downward pressure is largely due to a stronger USD, as investors increase bets on another interest rate hike by the Federal Reserve (Fed) at its monetary policy meeting on Wednesday.
The latest US inflation data have reinforced expectations of further monetary tightening, with markets pricing in around an 88% chance of a 25-basis-point interest rate hike by the Fed this week, up from around 59% a week earlier.
This supports the USD and puts downward pressure on NZD/USD, with investors closely monitoring the Fed meeting for further clues about the future path of US interest rates.