Markets price in up to three additional RBNZ rate increases through early 2027 after stronger-than-expected inflation data.
The New Zealand Dollar rose 0.12% to 0.5940 against the USD, extending a two-day advance. Expectations of another Reserve Bank of New Zealand rate hike in September drove demand, following hotter-than-expected inflation figures.
Investors now anticipate up to three more RBNZ tightening moves by early 2027. The US Dollar remained pressured despite a rebound in Treasury yields, as recent declines in long-dated debt reduced its appeal. China’s steady Loan Prime Rates also supported the NZD, given strong trade links.
US Treasury yields fell sharply after a debt buyback announcement, further weighing on the USD. The Fed’s hawkish tone in recent minutes had limited impact on the currency’s trajectory.