Rising US rate expectations and geopolitical risks lift the USD, pushing the NZD/USD pair to a near-term low near 0.5820.
The NZD/USD pair dropped to around 0.5820 in Asian trading on Wednesday, pressured by a stronger US Dollar. Escalating Middle East tensions and a hawkish Federal Reserve stance contributed to the Greenback’s gains, with traders pricing in a 41.5% chance of a 25 basis points rate hike by year-end.
Last week’s hotter-than-expected US inflation data reinforced expectations for prolonged higher rates, supporting the USD. Meanwhile, the People’s Bank of China left its Loan Prime Rates unchanged for the 12th straight month, aligning with market forecasts and signaling no immediate policy shift despite economic softness.
The one-year and five-year LPRs remained at 3.00% and 3.50%, respectively, as policymakers indicated no urgency to ease further.