New Zealand Dollar advances on RBNZ hawkish outlook

The New Zealand Dollar (NZD) experiences a surge on the second consecutive day, reaching a value close to 0.5950 against the US Dollar (USD) during European trading hours on Thursday. The appreciation of the Kiwi results from traders anticipating another interest rate increase from the Reserve Bank of New Zealand (RBNZ) in September.

Analysts at BNY maintain that the NZD is trading slightly above its 12-month average, but they remain skeptical about prevailing interest rate expectations. The bank expresses doubt about the market's pricing of interest rate forecasts, projecting only two additional hikes by the RBNZ before the year's end. While acknowledging robust domestic activity, the bank argues that inflation expectations are well-anchored, which limits the need for further rate hikes despite the NZD's strength.

The NZD/USD pair remains stable as the USD might face obstacles due to the US Treasury Department's decision to stabilize domestic bond markets by doubling their buyback operations for long-term securities. This intervention aims to control long-term borrowing costs and boost global USD liquidity, potentially exerting downward pressure on the USD in the future.

However, the USD may gain some safe-haven support due to heightened tensions in the Strait of Hormuz between the US and Iran. The GBP/USD pair declines from its May 11 high, staying around 1.3600 during European hours, as markets evaluate the potential impact of the US Treasury buyback plan. US Dollar sellers take a break while assessing whether the Treasury's move will prove transformative.

Focus shifts to upcoming US data and Middle East updates for additional trading momentum. EUR/USD consolidates below 1.1700 in European trading on Thursday, awaiting a move beyond this level before placing new bets. The US Dollar steadies following the Treasury's bond buyback plan, which initially contributed to its decline. Gold experiences minor intraday losses in the Asian session but remains near its highest level since early June, held back by geopolitical uncertainties and stable USD.

Major altcoins like Ripple, Solana, and Cardano maintain steady positions after a bullish rebound, supported by US Treasury bond buybacks. Technical analysis indicates further upside potential for XRP and SOL, while ADA may face resistance in its recent gains. Ripple trades near $1.0951 following a 10% increase the previous day.

The Treasury Department announced increased buyback operations in specific Treasury sectors, lifting the maximum from $2 billion to $4 billion, effective from September 9 to November 4.