FX.co ★ New Zealand Dollar Hovers Near 1-Month Lows

The New Zealand dollar remained around $0.574, close to its lowest point since early December, due to subdued expectations for imminent interest rate hikes. Recent economic indicators suggest a gradual recovery, yet not substantial enough to warrant an increase in interest rates. Market predictions show almost no likelihood of a rate hike by the Reserve Bank of New Zealand at its February meeting, and only a slight chance of such a move before September. Although the central bank indicated that its easing phase likely concluded last year after a cumulative reduction of 225 basis points, it has also countered any expectations of immediate tightening. The focus now shifts to the upcoming release of the fourth-quarter Consumer Price Index (CPI) data, which will offer further insights into the RBNZ's policy direction. On the international front, the New Zealand dollar faces additional pressure due to a strengthening US dollar, following inflation figures that met forecasts, supporting the Federal Reserve's case for maintaining steady interest rates later this month.