NZD Strengthens on Hawkish RBNZ Outlook, Despite Global Turbulence
The New Zealand Dollar (NZD) rose for the second consecutive day on Thursday, trading around 0.5940 at the time of writing, up 0.12% on the day.
The gain is largely due to expectations of another interest rate hike by the Reserve Bank of New Zealand (RBNZ), following hotter-than-expected inflation data.
Markets are now pricing in up to three additional RBNZ rate hikes through early 2027, reinforcing expectations of another monetary policy tightening at the September meeting.
The external environment also provides some support to the NZD. The People's Bank of China (PBoC) kept its Loan Prime Rates (LPR) unchanged for the 15th consecutive month on Thursday, with the one-year rate at 3% and the five-year rate at 3.5%.
The US Dollar remains under pressure despite a rebound in yields on Thursday, following an announcement from the US Treasury regarding its long-dated debt buyback operations.