FX.co ★ New Zealand Dollar Hovers Near 2-Month Lows

The New Zealand dollar inched up to around $0.577 on Thursday but stayed close to its lowest level in more than two months as investors assessed the latest GDP data. The economy expanded 0.8% in the March 2026 quarter, after a 0.5% increase in the previous quarter, though this fell short of the Reserve Bank of New Zealand’s 1.0% forecast. On an annual basis, GDP grew 1.5%, exceeding market expectations of a 1.1% rise. While the data point to a strengthening recovery, they largely capture conditions prior to the recent escalation of conflict in the Middle East, which is expected to have dampened activity. Forecasts now suggest GDP will barely grow, or may even contract, in the second quarter. Even so, traders are pricing in about a 70% probability of a 25-basis-point rate hike in July, with the RBNZ having already signaled further tightening to keep inflation expectations anchored. However, swap markets now imply only two rate increases this year, down from three previously anticipated.