NZD Slumps Amid US-Iran Tensions Despite Hawkish RBNZ Bets
The New Zealand Dollar (NZD) has declined to near 0.5650 despite bets on a Reserve Bank of New Zealand (RBNZ) interest rate hike.
The NZD/USD pair lost momentum and fell to a three-month low amid ongoing US-Iran tensions, which could boost the safe-haven currency, the Greenback.
However, market expectations have shifted hawkish, with traders now pricing in nearly an 80% odds of another 25 basis points (bps) hike to 3.00% at the upcoming October policy meeting.
RBNZ Governor Anna Breman's hawkish tone has lifted rate hike odds, with strategist at Brown Brothers Harriman noting that market-implied odds have risen from 57% to 73%.