Forex News: NZ Dollar Rises Amid RBNZ Rate Hike Speculation

NZ Dollar Rises Amid RBNZ Rate Hike Speculation

(RTTNews) - The New Zealand dollar strengthened against other major currencies in the early European session on Thursday, as investors are anticipating at least one more rate increase by the Reserve Bank of New Zealand or the RBNZ this year.

Last week, the Reserve Bank of New Zealand raised its Official Cash Rate by 25 basis points, hinting to additional monetary tightening in the months to come.

Additionally, the investors are now projecting two more rate increases this year.

Recent U.S. inflation data helped to reduce expectations of near-term Federal Reserve interest-rate increases, there are fears that higher energy prices as a result of mounting geopolitical risks in the Middle East could keep interest rates elevated.

Amid continued conflict, missile strikes, and diplomatic efforts surrounding Iran, U.S. President Donald Trump has defended Washington's military action against Iran and said Teheran will be "defeated very soon".

After the U.S. executed daylight airstrikes killing at least seven Iranian troops, Iran's top negotiator, Mohammed Bagher Ghalibaf, has declared that the county's armed forces have "complete freedom of action" against the "enemy's aggression".

Iran is fighting an "existential war" against the United States as Washington pursues objectives that extend beyond changing Iran's government, Ghalibaf said.

Media reports suggest that Trump is leaning toward further expanding U.S. military operations in Iran, including sending ground forces and the possible seizure of Kharg Island, Iran's primary oil export terminal.

In the European trading today, the NZ dollar rose to a 1-1/2-month high of 94.98 against the yen and a 3-1/2-month high of 1.1948 against the Australian dollar, from early lows of 94.59 and 1.1988, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 96.00 against the yen and 1.18 against the aussie,

Against the U.S. dollar and the euro, the kiwi edged up to 0.5858 and 1.9577 from early lows of 0.5834 and 1.9647, respectively. The kiwi may test resistance around 0.60 against the greenback and 1.94 against the euro.

Looking ahead, Canada housing starts for June, U.S. retail sales data for June, U.S. weekly jobless claims data for June, U.S. NY Fed services activity index for July, U.S. Philly Fed business conditions for July, U.S. business inventories for May, U.S. NAHB housing market index for July and U.S. pending home sales for June are slated for release in the New York session.

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