NZ Dollar Slips as Warsh Warns of Persistent Inflation

The New Zealand dollar has weakened against the US dollar after Federal Reserve Chair Kevin Warsh's hawkish comments at Jackson Hole.

Warsh said that inflation has not slowed meaningfully and policymakers need to be confident that underlying price pressures are easing, implying further rate hikes may be necessary.

The New Zealand dollar touched its lowest level since August 19, trading around $0.59, while economists expect the Reserve Bank of New Zealand (RBNZ) to raise its cash rate by another 25 basis points at its September meeting.

This could take the policy rate to 3% or higher by December, with two-thirds of economists anticipating at least one more hike following the RBNZ's first rate increase in over three years in July.