The New Zealand dollar climbed to around $0.589 on Friday, extending the previous session’s advance as the US dollar weakened following comments from Federal Reserve Governor Christopher Waller. Waller indicated he would support keeping interest rates on hold if inflation continued to ease, prompting investors to scale back expectations of a Fed rate hike later this month.
Markets are now focused on US employment data due later today for further guidance on the Fed’s policy path.
Domestically, the Reserve Bank of New Zealand lifted interest rates for a second consecutive meeting earlier this week but signalled a less aggressive trajectory for future tightening. As a result, traders are increasingly expecting the central bank to leave rates unchanged at its October meeting, capping the kiwi’s upside potential.
Despite its recent advance, the New Zealand dollar remains down about 0.5% for the week and is on track for a second consecutive weekly loss.
