The New Zealand dollar traded around $0.588 on Monday, easing slightly after touching a more than two-month high in the previous session as a weak US jobs report pressured the greenback. The US dollar hovered near a two-month low following an unexpected contraction in the US labour market in July, which reduced expectations of a Federal Reserve rate hike in September. Investors are now focused on this week’s inflation data for further guidance on the Fed’s policy trajectory.
The kiwi also remained supported by expectations that the Reserve Bank of New Zealand could raise interest rates next month, having signalled at its latest meeting that additional tightening may be needed to fully withdraw monetary stimulus and bring inflation under control. Still, last week’s softer domestic jobs data cast fresh doubt on how far the central bank will be willing to push interest rates.
