New Zealand Dollar gains as high inflation fuels odds of RBNZ September rate hikes
NZD/USD gains ground after registering modest losses in the previous day, trading around 0.5960 during the Asian hours on Tuesday.
New Zealand's currency, the NZD, experienced an increase as rising inflation raised the likelihood of the Reserve Bank of New Zealand (RBNZ) raising interest rates in September. The NZD/USD pair climbed to around 0.5960 during Tuesday's Asian trading hours. Strategists at Brown Brothers Harriman emphasized the crucial RBNZ meeting on September 2, which will feature a new Monetary Policy Statement and is highly anticipated by market participants.
The strategy suggests a potential 25 basis points increase to 2.75% in consecutive hikes, with investors believing that the central bank will continue its tightening trend. Meanwhile, the US Dollar (USD) faced downward pressure due to the US Treasury doubling its bond buyback operations, with US Treasury Secretary Scott Bessent potentially using up to $1 trillion from the Treasury General Account to finance these repurchases.
Geopolitical tensions escalated as the US expanded secondary sanctions targeting entities trading with Iran, warning potential enforcement actions on major financial institutions. Meanwhile, investors shifted their focus to a heavy calendar of economic events in the United States, including the release of consumer confidence figures and Personal Consumption Expenditures (PCE) price index on Wednesday.
The NZD/USD pair also benefited from the US Treasury's decision to expand its bond buyback strategy, with Secretary Bessent potentially using up to $1 trillion in Treasury General Account funds to finance these repurchases.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
