NZD Surges as RBNZ Hawkishness Boosts Rate Hike Expectations

The New Zealand Dollar (NZD) has strengthened above 0.5950 in Friday's Asian session, influenced by a hawkish tone from the Reserve Bank of New Zealand (RBNZ).

BNZ analysts expect the RBNZ to hike interest rates by 25 bps to 2.75% in September, which is considered near certain with 94% market pricing.

The NZD/USD pair has been bolstered by hotter-than-expected New Zealand's Consumer Price Index (CPI) inflation data for the second quarter (Q2), reinforcing expectations of a rate hike in September.

Markets will be cautious later in the day ahead of Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole Symposium, which could provide more clarity on his outlook for the US economy and interest rates.