NZD Lingers Near 1-Week Low Amid Hawkish Fed Comments

The New Zealand dollar continued to feel the effects of a strong US dollar on Monday, hovering around $0.591 after falling 0.6% to its lowest level in over a week on Friday.

This decline was largely due to hawkish comments from Federal Reserve Chair Kevin Warsh, who indicated that further interest rate increases may be necessary to contain inflation, prompting traders to increase bets on a September rate hike.

The shift in US rate expectations outweighed the support for the kiwi dollar from expectations of further policy tightening by the Reserve Bank of New Zealand, which is widely expected to deliver another quarter-point rate hike at its meeting later this week.