Markets price in nearly 50 basis points of additional RBNZ rate hikes after hawkish comments from Chief Economist Paul Conway.
The New Zealand Dollar climbed to 0.5780 against the USD in Asian trading, reversing a recent pullback. The move followed Reserve Bank of New Zealand Chief Economist Paul Conway’s remarks suggesting inflation may ease more slowly than forecast, fueling expectations of further monetary tightening.
The RBNZ raised rates by 50 basis points on July 8, its first hike in three years. Markets now anticipate nearly 50 basis points of additional increases over the next year, supporting the NZD. The currency’s strength persisted despite a firmer USD, driven by escalating US-Iran tensions and Fed rate-hike bets.
The USD Index (DXY) reached a one-and-a-half-week high amid geopolitical risks, including US strikes on Iran and Iranian retaliatory actions in the Strait of Hormuz.