The New Zealand dollar weakened to about $0.579, hovering near its lowest level in more than six weeks, as the US dollar remained firm on the back of elevated US inflation in August. The latest data strengthened expectations that the Federal Reserve will raise interest rates at its meeting later this week.
At the same time, investors are awaiting New Zealand’s second-quarter GDP figures for fresh insight into the economy’s performance and the Reserve Bank’s future policy path. Growth is expected to have been subdued in the three months to June, as businesses and households contended with sharply higher fuel costs.
Earlier this month, the Reserve Bank of New Zealand raised its policy rate by 25 basis points to 2.75% for a second consecutive meeting, but indicated that any additional tightening would be gradual, citing mounting risks to the economic outlook.
