Traders reduce Federal Reserve rate hike expectations after softer US inflation figures, lifting the New Zealand Dollar.
The NZD/USD pair climbed to 0.5855 in early European trading, extending gains above 0.5850. The move follows softer US inflation data, which prompted investors to scale back bets on imminent Federal Reserve rate hikes, weakening the US Dollar against the New Zealand Dollar.
Prior to the release, markets had priced in a higher probability of further Fed tightening. The latest inflation print, however, suggests a potential shift in the central bank’s policy trajectory, reducing upward pressure on the USD.
No immediate market reaction data was provided, but the NZD’s strength reflects broader sentiment toward a less aggressive Fed stance.