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NZD/USD gains as New Zealand ANZ business outlook jumps to 56.1
The July ANZ Business Outlook Index rose to 56.1 from 36.6, and markets now expect the RBNZ to lift rates by 25 bps in September.
NZD/USD extended gains for a third straight day in Asian trading, holding near 0.5810 as New Zealand’s business confidence improved. FXStreet attributed the support to a sharp jump in the ANZ Business Outlook Index, which rose to 56.1 in July from 36.6 in the prior month, the highest level since February.
The report linked the stronger outlook largely to easing international oil prices as geopolitical tensions in the Middle East began to subside. It also said hawkish expectations for the Reserve Bank of New Zealand are helping underpin the currency.
Markets are widely looking for a 25 basis point RBNZ rate increase at the September meeting, with NZ interest rate futures pricing levels reaching at least 3.0% by year end and a projected peak of 3.5% around mid-2027.
FXStreet also flagged risks to the upside from the US side, noting the Federal Reserve kept rates steady at 3.5% to 3.75% in July but with a hawkish tilt, including dissents from several Fed presidents and comments from Fed Chairman Kevin Warsh emphasizing commitment to the 2% inflation target without providing forward guidance. It added that rising regional disruption risk to energy shipping routes is keeping global oil supply channels strained.