FX.co ★ Kiwi Dollar Hovers at Two-Week Low

The New Zealand dollar traded around $0.595, near a two-week low, pressured by diminishing expectations of near-term rate hikes by the Reserve Bank of New Zealand (RBNZ). Last week, Governor Anna Breman noted that improving economic conditions should allow growth to strengthen this year without reigniting significant inflationary pressures, implying less urgency for further monetary tightening. This followed the central bank’s decision to leave the cash rate unchanged, while stressing that policy will remain accommodative as inflation moves closer to the midpoint of its target range. Consequently, markets have scaled back expectations for a rate increase as early as September or October. Adding to the bearish tone, concerns about US trade policy intensified after President Donald Trump announced an increase in global tariffs from 10% to 15%, a development that poses risks for the New Zealand dollar given the country’s heavy dependence on exports.