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NZD/USD rises as RBNZ seen leaning hawkish in September
The Kiwi trades near 0.5950 and moves on rate-hike expectations, even as US Dollar support could firm from Strait of Hormuz tensions.
NZD/USD extended gains for a second straight day on Thursday, holding around 0.5950 in European hours as traders looked for the Reserve Bank of New Zealand to deliver another rate hike in September, FXStreet reported. BNY strategists said the pair is slightly above its rolling 12-month average, but they are skeptical about current market rate assumptions. The bank pointed to expectations for two more RBNZ hikes by year-end, while noting that robust domestic activity and well-anchored inflation expectations could temper the case for further tightening despite NZD strength.
FXStreet also linked NZD performance to shifting US Dollar factors. It noted the US Treasury plans to at least double buyback operations for long-dated securities maturing in 10 to 30 years to stabilize domestic bond markets, a move aimed at capping long-term borrowing costs and improving global USD liquidity, which could weigh on the dollar.
At the same time, the article said the Greenback may still find safe-haven support amid heightened geopolitical friction around the Strait of Hormuz. FXStreet cited increased risk aversion tied to US and Iran tensions, which could help underpin the USD even as rate expectations shift.