New Zealand Dollar Tumbles Below 0.5850 Amid Oil Price Surge
The New Zealand Dollar continued its downward trend on Wednesday, extending losses below 0.5850 to test four-week lows at 0.5835. This marks the third consecutive day of decline for the Kiwi against the US Dollar.
The dismal market mood, fueled by the widening Middle East conflict and higher oil prices, is hurting confidence in the risk-sensitive New Zealand Dollar. Oil prices have rallied further, with Brent Crude reaching session highs above $99.00, drawing closer to the feared $100 level. This increase in oil prices exposes New Zealand's oil-importing economy.
The US Consumer Price Index data, due on Friday, will be closely watched by investors as they await confirmation of a Federal Reserve rate hike next week. However, Brown Brothers Harriman's Elias Haddad argues that even if a September Fed hike becomes a done deal, the USD may not make new cyclical highs, given tightening by other major central banks.