30.01.202603:36:14UTC+00New Zealand Dollar Set for Strong Monthly Gain

The New Zealand dollar dipped to approximately $0.604 on Friday, yet it remained poised for a robust monthly gain, fueled by heightened expectations of an imminent interest rate increase. Solid economic indicators, particularly the unexpected rise in inflation reported last week, have strengthened market beliefs that the Reserve Bank of New Zealand might commence tightening its monetary policy later in the year. This anticipation propelled the kiwi to reach a seven-month peak on Thursday. Recent data further indicated an increase in consumer confidence in January, reaching its highest point since August 2021, alongside a trade surplus that exceeded forecasts. Although the RBNZ is anticipated to maintain steady rates during its February meeting, markets are increasingly factoring in a rate hike as early as July, with a substantial likelihood of action by September. The NZD also gained an advantage from the weakened US dollar, influenced by President Trump’s new tariff threats that heightened global tensions and diminished the appeal of US assets. The kiwi has appreciated over 1% this week and has risen approximately 5% thus far in January.