NZD Falls on China Data and Rising US Rate Hike Expectations
The New Zealand Dollar (NZD) has remained subdued following the release of key economic data from China. The country's close trading partner saw Retail Sales rise by 0.4% year-over-year in August, below the expected 0.8% growth. Meanwhile, Industrial Production climbed 5.2% YoY in the same period, exceeding forecasts.
The NZD/USD pair has lost ground as a result of these figures and increased expectations for a US Federal Reserve interest rate hike this week. The US Dollar (USD) is receiving support from rising inflation concerns, which are placing pressure on the Fed to tighten monetary policy. Money markets have surged to reflect over a 92% chance of a rate hike, up from roughly 60% just a week prior.
The US Consumer Price Index (CPI) rose in August, with core inflation recording its largest gain in four months. The US 10-year Treasury yield has also surged toward 5% due to broader inflation and fiscal worries.