New Zealand Dollar Slips as Hawkish Fed Tone Boosts US Dollar

2026-08-28 15:21 By Joana Ferreira 1 min. read

The New Zealand dollar weakened toward $0.59, touching its lowest level since August 19, as investors favored the US dollar following Federal Reserve Chair Kevin Warsh’s first Jackson Hole speech, despite expectations that the Reserve Bank of New Zealand will continue tightening policy this year.

In his first major speech since becoming Fed chair in May, Warsh warned that inflation has not meaningfully slowed and said policymakers need to be confident that underlying price pressures are easing; otherwise, the central bank still has “work to do.” In New Zealand, economists widely expect the RBNZ to raise its cash rate by another 25 basis points at its September meeting, with around two-thirds anticipating at least one more hike.

This could take the policy rate to 3% or higher by December.

The outlook follows the RBNZ’s first rate increase in more than three years in July, when policymakers indicated that further tightening may be needed to bring inflation back to target.



News Stream
New Zealand Dollar Slips as Hawkish Fed Tone Boosts US Dollar
The New Zealand dollar weakened toward $0.59, touching its lowest level since August 19, as investors favored the US dollar following Federal Reserve Chair Kevin Warsh’s first Jackson Hole speech, despite expectations that the Reserve Bank of New Zealand will continue tightening policy this year. In his first major speech since becoming Fed chair in May, Warsh warned that inflation has not meaningfully slowed and said policymakers need to be confident that underlying price pressures are easing; otherwise, the central bank still has “work to do.” In New Zealand, economists widely expect the RBNZ to raise its cash rate by another 25 basis points at its September meeting, with around two-thirds anticipating at least one more hike. This could take the policy rate to 3% or higher by December. The outlook follows the RBNZ’s first rate increase in more than three years in July, when policymakers indicated that further tightening may be needed to bring inflation back to target.
2026-08-28
New Zealand Dollar Advances
The New Zealand dollar rose to around $0.596 on Friday, supported by expectations that the Reserve Bank will continue to tighten policy this year. Economists widely expect the RBNZ to raise its cash rate by another 25 basis points next week, with two-thirds anticipating at least one more hike, potentially taking the rate to 3% or higher by December. The outlook follows the RBNZ’s first rate increase in more than three years in July, when the central bank indicated that further tightening may be needed to bring inflation back to its target. Externally, investors are awaiting Federal Reserve Chair Kevin Warsh’s first Jackson Hole speech later today for clues about the likelihood of a September rate move. Meanwhile, geopolitical developments continue to weigh on risk-sensitive assets, with reports that President Trump is no longer interested in reviving the June agreement with Iran. Despite Friday’s advance, the kiwi is down 0.2% for the week.
2026-08-28
New Zealand Dollar Holds Decline
The New Zealand dollar traded around $0.594 on Thursday, after falling 0.5% in the previous session as the US dollar advanced following a batch of economic data. US inflation and other economic indicators released on Wednesday slightly increased expectations for a Federal Reserve rate hike, with traders now awaiting Fed Chair Kevin Warsh’s first speech at the Jackson Hole symposium on Friday for clues about the Fed’s September policy decision. Still, the kiwi remained supported by expectations that the Reserve Bank of New Zealand will deliver another 25-basis-point rate hike at its meeting next week, with the policy rate seen reaching 3.0% by year-end. Risk sentiment also improved following an agreement between Iran and Oman on the sharing of control and revenues from the Strait of Hormuz.
2026-08-27