FX.co ★ New Zealand Dollar Hovers Near 6-Month High

The New Zealand dollar experienced a decline to approximately $0.601 on Wednesday but maintained proximity to a six-month peak, driven by expectations of forthcoming monetary tightening. Recent data revealed that consumer inflation for the fourth quarter surpassed forecasts and exceeded the Reserve Bank's target range, bolstering the prospect of interest rate increases later in the year. Governor Anna Breman has notably not dismissed speculations of a rate rise this year—an adjustment from her previous stance where she mitigated the likelihood of an imminent hike. Simultaneously, Finance Minister Nicola Willis characterized the inflation figures as a temporary "blip" but conceded that the central bank would eventually need to commence raising interest rates. Although the Reserve Bank of New Zealand (RBNZ) is anticipated to maintain current rates during its February meeting, market sentiment predicts a substantial probability of a hike by September, including a roughly 50% chance of action as early as July. Additionally, the New Zealand dollar found support from a weaker US dollar.