23.04.202601:07:54UTC+00New Zealand Dollar Holds Firm

The New Zealand dollar hovered near six-week highs around $0.59 as investors continued to assess the Reserve Bank of New Zealand’s interest rate outlook. Stronger-than-expected first-quarter inflation data released earlier this week led markets to increase bets on a 25 basis point cash rate hike in May, with the probability of such a move now priced at over 50%, up from below 30% before the data. Inflationary pressures are expected to strengthen further in the second quarter as the full impact of higher energy costs flows through. The RBNZ has recently warned that it would act decisively if inflation accelerates.

Still, many analysts expect policymakers to keep rates on hold in the near term, as the war in the Middle East threatens to derail the country’s fragile economic recovery. At the same time, investors were awaiting details of further peace talks between the US and Iran, after President Trump said he would extend their ceasefire.