NZD Surges Against USD as Hopes for Fed Rate Hike Fade

The New Zealand Dollar (NZD) has gained strength against the US Dollar (USD) as the greenback weakens across the board. The NZD/USD pair has bounced back up to session highs above 0.5880, with bulls targeting a two-month high of around 0.5900.

Brown Brothers Harriman's Elias Haddad attributes this development to cooling US CPI and PPI inflation in July, which has trimmed the implied odds of a Federal Reserve interest rate hike in September to nearly 30%. This repricing is keeping the USD in check and lifting risk appetite despite the ongoing US-Iran conflict.

The NZD/USD pair is currently trading at 0.5883, above its 200-day Simple Moving Average (SMA). Momentum indicators are neutral to bullish, with the Relative Strength Index (RSI) near 59 hinting at a constructive bias.