Forex
Home›Forex›Major Pairs›NZD/USD holds near 0.5655 as RBNZ tightening bets rise
NZD/USD holds near 0.5655 as RBNZ tightening bets rise
Markets now price an 87% chance of a third RBNZ rate hike in October, helping offset pressure from a stronger US dollar and surging Treasury yields.
FXStreet said NZD/USD was trading around 0.5655 on Thursday, down 0.30% on the day, with losses limited by expectations for additional monetary tightening from the Reserve Bank of New Zealand (RBNZ).
The outlet noted that pricing for a third RBNZ rate hike in October has jumped to about 87% from roughly 20% earlier in the month, after RBNZ Governor Anna Breman warned that persistently higher oil prices could lift near-term inflation above the central bank’s latest projections.
Despite the Kiwi’s support, FXStreet said NZD/USD remains under pressure from the US dollar as US Treasury yields extend their sharp rise. It cited the 10-year yield around 5.16%, the highest since 2007, and the two-year yield near 4.91%, moves it linked to stronger US activity data.
FXStreet added that a pickup in the US economy has helped lift bets on another Federal Reserve rate hike in October, with CME FedWatch putting the probability at about 68% versus 55% a week earlier. The report also pointed to the Philadelphia Fed president’s view that rates may need to rise again to bring inflation closer to the 2% target.