RBNZ Hikes Rates as BoC Holds Firm Amid Trade Tensions

The Reserve Bank of New Zealand (RBNZ) raised interest rates by 25 basis points to 2.75% in its September meeting, as expected due to rising inflationary pressure. However, this decision was met with some disappointment from hawks as the central bank did not adjust its inflation expectations.

The RBNZ's move has already had an impact on the New Zealand dollar (NZD), which turned up from a test of the .5900 support and is currently consolidating losses from the .5988 high. The NZD/USD pair is expected to see deeper pullbacks later, retracing strong gains from the June current year low towards support at the .5850 congestion and 38.2% Fibonacci level.

The Bank of Canada is set to leave interest rates unchanged at 2.25% in its September meeting, despite heightened trade tensions with the United States. The central bank has pointed to potential tightening if elevated oil prices feed into core inflation or easing if increased US tariffs undermine the economy.