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NZD/USD slips as New Zealand inflation expectations cool

NZD/USD was around 0.5850, while NZD pricing for further RBNZ tightening was weighed down by easing two-year inflation expectations to 2.34% in Q3 2026.

Reported · Written up by our desk · Major Pairs

The New Zealand dollar stayed under pressure against the US dollar, with NZD/USD trading around 0.5850 and down 0.15% on the day, as softer inflation expectations in New Zealand raised doubts about additional Reserve Bank of New Zealand tightening.

RBNZ two-year inflation expectations eased to 2.34% in the third quarter of 2026 from 2.53% previously, while one-year expectations were 2.6%, a shift that could reduce expectations for another 25 basis point rate hike at the September meeting. FXStreet said the market previously looked more confident that the RBNZ would deliver further tightening.

Support for NZD losses was also limited by weakness in the US dollar after subdued US inflation data, including Producer Price Indexes. The US PPI slowed to 4.7% year over year from 5.5% previously, with core PPI easing to 4.2% year over year from 4.7%.

Additional US labor data offered only limited support for the greenback, with initial jobless claims rising to 209K for the week ending August 8, while continuing claims fell 22K to 1.777M for the week ending August 1. FXStreet also noted geopolitical risks could cap the dollar’s decline, citing ongoing tensions between Washington and Tehran, alongside the Trump administration’s push for broader sanctions tied to Iranian oil exports.

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