The New Zealand Dollar falls 1.65% weekly as Federal Reserve rate hike expectations strengthen the US Dollar.
The New Zealand Dollar (NZD) hit a daily low of 0.5724 against the US Dollar (USD) on Friday, marking its weakest performance among major currencies. The decline extends a weekly loss of 1.65%, driven by rising expectations of a Federal Reserve rate hike in October.
Futures markets now price a 77% chance of an October hike, up from less than 40% a week ago, with nearly 90% odds of at least one increase by year-end. The Fed’s hawkish stance, reinforced by Chairman Kevin Warsh’s inflation focus, has bolstered the USD. Geopolitical tensions, including delayed US-Iran talks, have added to investor caution.
Technical indicators show the NZD/USD pair remains bearish below 0.5800, with momentum metrics deep in negative territory. The year-to-date low of 0.5680 is now in sight as sellers dominate.