NZD/USD Sinks to 0.5900 as RBNZ Decision Looms and Greenback Holds Steady
The New Zealand dollar (NZD) slipped to around 0.5900 against the US dollar on Tuesday, down 0.24%, as the greenback held onto its gains in anticipation of the Reserve Bank of New Zealand's interest rate decision on Wednesday.
The US Dollar Index remained steady at around 99.65, despite mixed US economic indicators, including a lower-than-expected ISM Manufacturing PMI reading of 54.6 in August and a drop in the Employment Index to 51.2 from 52.8.
Markets are pricing in a 25 basis point hike to 2.75% for the RBNZ decision, but some analysts believe this is overly aggressive and that the bank may actually deliver a less hawkish statement than expected.
A bearish outlook on NZD/USD is further supported by lower international oil prices, which are likely to force the central bank to revise its inflation projections lower.