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01.09.202604:32:38UTC+00New Zealand Dollar Weakens

The New Zealand dollar eased to around $0.59 on Tuesday, hovering near a two-week low, as cautious investor sentiment outweighed expectations of a domestic rate hike. Global bond yields climbed to multi-decade highs amid concerns over persistent inflation, reinforcing bets on a Federal Reserve interest rate increase later this month and dampening demand for riskier assets. At the same time, renewed conflict in the Middle East added pressure on currencies from economies vulnerable to higher energy costs. The kiwi’s decline was partly contained by expectations that the Reserve Bank of New Zealand will raise its official cash rate by 25 basis points to 2.75% on Wednesday. Markets also project the OCR to rise to about 3% by December and 3.5% next year, following the central bank’s indication that monetary policy needs to become less accommodative.

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