NZD Surges to Near 0.5900 as Fed Hike Odds Plummet
The New Zealand Dollar (NZD) has gained strength to near 0.5895 against the US Dollar (USD) during Asian trading hours on Friday, following a dovish speech from Federal Reserve Governor Christopher Waller.
Waller stated that he is leaning towards keeping interest rates steady at the Fed's September meeting, provided there are no surprises from upcoming inflation data. This has trimmed bets on a US rate hike and weighed on the Greenback.
The NZD/USD pair now prices in nearly 50.2% odds of a quarter-point hike in September, down from 63.2% on Wednesday, according to the CME's FedWatch tool.
However, RBNZ Governor Anna Breman stated that there will likely be further interest rate increases, but policymakers want to take time to assess the impact of previous hikes. RBNZ Assistant Governor Karen Silk added that the central bank is more likely to wait until December before raising interest rates again.