NZD Under Pressure as Revised Inflation Expectations Raise Doubts Over Rate Hikes

The New Zealand Dollar (NZD) is under pressure against the US Dollar (USD), trading 0.45% down to around 0.5830, as revised inflation expectations from the Reserve Bank of New Zealand (RBNZ) raise doubts over interest rate hikes.

The RBNZ's two-year inflation expectations for the third quarter this year came in lower than expected at 2.34% Year-on-Year (YoY), down from 2.53% previously.

This development has cooled market confidence in a potential interest rate hike by the RBNZ at its September policy meeting, which was earlier anticipated due to strong economic recovery and labor market data.