New Zealand Dollar gains as softer Fed outlook offsets Middle East tensions
- The New Zealand Dollar gains against the US Dollar, with NZD/USD trading around 0.5850, up 0.14% on the day.
- Expectations of a more accommodative Federal Reserve policy continue to support the Kiwi.
- Geopolitical tensions in the Middle East are limiting risk appetite without derailing the New Zealand Dollar's advance.
NZD/USD moves higher on Monday and trades around 0.5850 at the time of writing, up 0.14% on the day, as the US Dollar (USD) weakens following the latest US inflation data. Investors have scaled back expectations of further interest rate hikes from the Federal Reserve (Fed), weighing on the Greenback and supporting higher-yielding currencies.
The New Zealand Dollar (NZD) is also drawing support from the monetary policy divergence with the Reserve Bank of New Zealand (RBNZ). New Zealand's central bank raised its Official Cash Rate earlier this month and signaled that further tightening remains likely if inflationary pressures persist. Several banks, including BBH and HSBC, believe that still-elevated inflation and an improving domestic economic outlook argue for additional rate hikes, a supportive factor for the Kiwi.
In the United States (US), data released last week showed slower Consumer Price Index (CPI) and Producer Price Index (PPI) inflation, reinforcing expectations that the Fed will keep interest rates unchanged at its next policy meeting. Markets now see a rate hold as the most likely outcome, although several Fed officials continue to call for caution regarding inflation risks.
In Asia, the People's Bank of China (PBoC) left its benchmark lending rates unchanged for a fourteenth consecutive month, a widely expected decision that had little impact on the New Zealand Dollar.
Geopolitical tensions continue to limit the upside for risk-sensitive currencies. Iran said intermediaries have delivered messages aimed at de-escalating tensions in recent days, while Yemen's Houthis announced a naval blockade against Saudi Arabia, adding to concerns over energy markets. So far, these developments have boosted demand for safe-haven assets without derailing NZD/USD's advance, as the persistent weakness in the US Dollar remains the pair's main driver.
New Zealand Dollar Price Today
The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.21% | -0.02% | 0.05% | 0.16% | -0.42% | -0.08% | 0.28% | |
| EUR | -0.21% | -0.19% | -0.13% | -0.07% | -0.62% | -0.33% | 0.07% | |
| GBP | 0.02% | 0.19% | 0.07% | 0.14% | -0.43% | -0.12% | 0.24% | |
| JPY | -0.05% | 0.13% | -0.07% | 0.11% | -0.48% | -0.13% | 0.20% | |
| CAD | -0.16% | 0.07% | -0.14% | -0.11% | -0.57% | -0.23% | 0.10% | |
| AUD | 0.42% | 0.62% | 0.43% | 0.48% | 0.57% | 0.33% | 0.71% | |
| NZD | 0.08% | 0.33% | 0.12% | 0.13% | 0.23% | -0.33% | 0.34% | |
| CHF | -0.28% | -0.07% | -0.24% | -0.20% | -0.10% | -0.71% | -0.34% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).