New Zealand Dollar Slumps as US Yields Soar Ahead of Fed Decision

The New Zealand Dollar has been sliding against the US Dollar ahead of the Federal Reserve's interest rate decision, expected on Wednesday. The kiwi is under pressure from a stronger greenback, driven by higher US yields and expectations of a 25 basis points hike to 3.75%-4.00%. Markets are also bracing for New Zealand's Q2 GDP data, due late on Wednesday, which is forecast to slow sharply to 0.1%.

The NZD/USD pair has been extending its decline toward the bottom of its recent range, trading near the 0.5760s. The 10-year US Treasury yield has climbed to its highest level since 2007, topping 5%, as oil prices surge and inflation concerns rise.