New Zealand Dollar Tumbles as Fed Rate Hike Looms
The New Zealand Dollar has continued to slide against the US Dollar ahead of the Federal Reserve's decision on interest rates. The kiwi is under pressure from a stronger greenback, driven by rising US yields and expectations of a rate hike this week.
The Fed is expected to raise rates by 25 basis points to 3.75%-4.00% on Wednesday, which has weighed on growth-sensitive currencies like the New Zealand Dollar. The 10-year US Treasury yield has climbed to its highest level since 2007, topping 5%, as a more than 3% jump in oil revived inflation worries.
New Zealand's Q2 GDP is due late on Wednesday, with growth expected to slow sharply to 0.1% on the quarter from 0.8%. This could further weigh on the NZD/USD pair if actual results are worse than forecast.