NZD Plunges to 3-Month Low Amid Strong USD and Rising Oil Prices
The New Zealand dollar has hit its lowest level in three months due to the strong US dollar. The Kiwi currency traded around $0.566, down from its previous highs. This decline is largely attributed to robust US economic data and hawkish remarks from Federal Reserve officials, which have strengthened expectations for further rate hikes.
President Donald Trump's rejection of an Iranian proposal to reopen the Strait of Hormuz has also pushed oil prices higher, raising inflation concerns globally. This has prompted central banks, including the Reserve Bank of New Zealand (RBNZ), to consider further monetary tightening.
The RBNZ is expected to deliver a third rate hike in October, after Governor Anna Breman warned that persistent increases in oil prices could push near-term inflation above the bank's latest forecast. However, the strong US dollar continues to outweigh support from rising RBNZ rate-hike expectations.