New Zealand Dollar remains subdued as two-year QoQ RBNZ Inflation Expectations ease in Q3
NZD/USD extends its losses for the fourth successive day, trading around 0.5840 during the Asian hours on Thursday. The pair remains subdued following the release of RBNZ Inflation Expectations.
The New Zealand Dollar (NZD) has continued to weaken for the fourth consecutive day, trading near 0.5840 in the Asian trading hours on Thursday. This subdued performance follows the release of Inflation Expectations data from the Reserve Bank of New Zealand (RBNZ). Over a two-year period, inflation expectations in New Zealand dropped to 2.34% in Q3 2026 from 2.53% in Q2 of the same year.
While one-year forward inflation projections stand at 2.6%, there is a possibility that the NZD/USD pair may stabilize as the RBNZ might introduce another quarter-point rate increase next month. The depreciation of the NZD/USD pair is attributed to the strengthening of the US Dollar (USD) due to escalating tensions between the US and Iran.
The US has asserted control over the strategic waterway amid increasing rhetoric, while diplomatic talks remain stalled. Meanwhile, the Trump administration aims to intensify economic pressure on Iran through broader sanctions and a naval blockade to curb Iranian oil exports. In the US, consumer price inflation in July matched expectations, with the headline index rising by 0.1% month-over-month (0.074% before rounding).
The modest increase was primarily due to declining energy prices (gasoline dropped 3% month-over-month) and slowing food inflation, indicating that reduced fuel and food costs helped keep overall price pressures in check.
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