FX.co ★ New Zealand Dollar Edges Higher

The New Zealand dollar inched up to around $0.595 on Thursday, recovering slightly after a 0.5% decline in the previous session as the US dollar strengthened on the back of fresh economic data. Figures on US inflation and other indicators released on Wednesday nudged up expectations of a potential Federal Reserve rate hike, with markets now focused on Fed Chair Kevin Warsh’s first address at the Jackson Hole symposium on Friday for guidance on the Fed’s September policy decision.

Despite the recent pressure, the kiwi remained underpinned by expectations that the Reserve Bank of New Zealand will deliver another 25-basis-point increase at its meeting next week, with the policy rate projected to reach 3.0% by the end of the year. Risk sentiment also improved after Iran and Oman reached an agreement on sharing control and revenues from the Strait of Hormuz.