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NZD/USD rises toward 0.5950 as RBNZ tone offsets easing Fed hike bets
The pair is near a two-and-a-half-month high after the PBOC kept both one-year and five-year LPRs unchanged at 3.0% and 3.5% and markets scaled back the odds of a September Fed hike.
The New Zealand dollar edged higher against the US dollar, pushing NZD/USD toward 0.5950 during Asian trading and holding near a two-and-a-half-month high, according to FXStreet.
The move was supported by a hawkish tone from the Reserve Bank of New Zealand and by softer US inflation data, while expectations for continued NZ monetary tightening were reinforced by hotter-than-expected New Zealand CPI. FXStreet also pointed to swaps pricing for up to three further RBNZ rate hikes through early 2027.
At the same time, expectations for a US rate increase in September weakened. FXStreet cited CME FedWatch Tool pricing of a 32.7% probability for a Fed hike at the September policy meeting, down from 47% a month earlier, which weighed on the Greenback.
China also added to the backdrop for risk appetite, with the People’s Bank of China leaving its Loan Prime Rates unchanged at 3.00% for the one-year and 3.50% for the five-year. FXStreet said NZD/USD also remains supported technically above the 100-day simple moving average, with resistance seen near 0.5960 and support around 0.5865.