16.09.202602:37:27UTC+00Kiwi Drops Further Ahead of Fed Decision

The New Zealand dollar weakened further to $0.574, its lowest level in more than two months, as traders positioned for a widely expected Federal Reserve interest rate hike later today, bolstering the US dollar. Markets are also focused on the Fed’s updated dot plot and economic projections for signals about the future path of US rates.

Attention is simultaneously turning to New Zealand’s second-quarter GDP figures due Thursday, with economists forecasting only modest quarter-on-quarter growth. Current market pricing points to another rate hike by the Reserve Bank of New Zealand at its October meeting, despite policymakers indicating a slower pace of tightening.

Meanwhile, RBNZ Assistant Governor Karen Silk has resigned after more than four years at the central bank. She is expected to participate in two more Monetary Policy Committee meetings before leaving in mid-December.