New Zealand Dollar Drops for 2nd Day

2026-03-25 03:51 By Judith Sib-at 1 min. read

The New Zealand dollar edged lower to around $0.582 on Wednesday, extending the previous session’s losses as investors reassessed the Reserve Bank’s policy outlook following comments from the central bank.

Governor Anna Breman said on Tuesday the RBNZ will look through temporary energy-driven inflation but is prepared to hike rates if persistent price pressures threaten inflation expectations.

Since the conflict erupted, investors have speculated that the RBNZ may need to tighten policy earlier than expected to offset the inflationary impact of rising energy costs.

However, Breman’s comments prompted markets to trim bets on an imminent move.

Markets are pricing in a 44% chance of a rate hike in May, down from 68% at the start of the week.

Chief Economist Paul Conway also noted that the central bank continues to see lingering economic slack, which will influence how forcefully it responds to any inflationary pressures stemming from higher oil prices.



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New Zealand Dollar Drops for 2nd Day
The New Zealand dollar edged lower to around $0.582 on Wednesday, extending the previous session’s losses as investors reassessed the Reserve Bank’s policy outlook following comments from the central bank. Governor Anna Breman said on Tuesday the RBNZ will look through temporary energy-driven inflation but is prepared to hike rates if persistent price pressures threaten inflation expectations. Since the conflict erupted, investors have speculated that the RBNZ may need to tighten policy earlier than expected to offset the inflationary impact of rising energy costs. However, Breman’s comments prompted markets to trim bets on an imminent move. Markets are pricing in a 44% chance of a rate hike in May, down from 68% at the start of the week. Chief Economist Paul Conway also noted that the central bank continues to see lingering economic slack, which will influence how forcefully it responds to any inflationary pressures stemming from higher oil prices.
2026-03-25
New Zealand Dollar Weakens
The New Zealand dollar slipped to around $0.583 on Tuesday, following a volatile session on Monday in which it had closed higher, as investors digested RBNZ Governor Anna Breman's remarks. Breman said the central bank would look through a temporary surge in energy costs stemming from the Middle East conflict, but higher interest rates could become necessary if inflationary pressures persist. She emphasized that the duration of the energy shock would be a key factor in balancing the risk of higher inflation against its potential drag on economic growth. Since the conflict erupted, investors have speculated that the RBNZ may need to tighten policy sooner than previously expected to counter the inflationary impact of rising energy prices. Markets currently see little chance of a rate hike in April, but imply roughly a 60% probability of one in May.
2026-03-24
Kiwi Dollar Falls To January Low
The New Zealand dollar weakened to around $0.565, hitting its lowest level since late January, as markets weighed a cautious economic outlook against persistent inflation concerns. Fitch Ratings downgraded New Zealand’s credit outlook, lowering its AA+ rating to negative due to growing challenges in reducing debt after years of delayed fiscal consolidation. This added to worries following weaker-than-expected GDP figures last week, underscoring a still-fragile recovery that faces further risks amid the ongoing conflict in the Middle East. These concerns offset rising expectations for a hawkish Reserve Bank policy stance. Market pricing has shifted sharply, now reflecting nearly 90 basis points of tightening this year. Just last month, the central bank indicated that even a single rate hike was not fully priced in. Investors are now awaiting Governor Anna Breman’s speech on Tuesday for cues on the economy and rate path.
2026-03-23