FX.co ★ New Zealand Dollar Hits 2-Month Low

The New Zealand dollar slipped to about $0.576, its weakest level in two months, as the US dollar firmed on expectations that the Federal Reserve will raise interest rates this week. The kiwi was also weighed down by signs of soft domestic demand: electronic card spending fell 0.9% month-on-month in August, reflecting pressure from higher fuel prices and borrowing costs. Investors are now focused on New Zealand’s second-quarter GDP figures due Thursday, with economists forecasting only modest growth. Markets currently assign around a 60% probability that the Reserve Bank of New Zealand will deliver another 25 basis point rate increase at its October meeting, even as policymakers have indicated that the pace of tightening is likely to slow.