The New Zealand dollar rose to about $0.572, its highest level in nearly three weeks, after the central bank struck a hawkish tone and fresh data pointed to robust manufacturing growth. Manufacturing activity in New Zealand expanded in June at its fastest pace in almost five years, reinforcing signs of a pickup in economic momentum. Reserve Bank of New Zealand Governor Anna Breman noted improving growth prospects in the second half of the year.
On Wednesday, the central bank lifted the official cash rate by 25 basis points, its first increase in three years, stating that stronger demand could amplify medium-term inflation pressures. The move coincided with a renewed rise in oil prices following an escalation in tensions between the US and Iran, underscoring the bank’s inflation concerns. Breman emphasized that higher fuel costs remain the main upside risk to inflation and cautioned that, if the conflict continues, there is a danger that elevated inflation could become entrenched.
