Kiwi Dollar Extends Gains on Rate-Hike Bets

2026-10-16 02:10 By Judith Sib-at 1 min. read

The New Zealand dollar rose to $0.565 on Friday, extending its rebound from an 18-month low amid growing expectations for another rate hike from the Reserve Bank.

Markets are pricing in an 86% chance that the RBNZ will raise the official cash rate for a third time to 3% at its meeting on October 28.

On Thursday, Chief Economist Paul Conway said the rate decision later this month remains open and that the central bank continues to believe that an increase in the OCR is most likely, although the timing remains uncertain.

Meanwhile, data released today showed that New Zealand's electronic retail card spending fell 0.4% month on month in September, while food inflation accelerated to 2.4%, highlighting persistent price pressures.

Market attention now turns to next week’s third-quarter inflation data for further clues on the monetary policy outlook.

The kiwi has gained 0.3% this week, putting it on track to snap a seven-week losing streak.



News Stream
Kiwi Dollar Extends Gains on Rate-Hike Bets
The New Zealand dollar rose to $0.565 on Friday, extending its rebound from an 18-month low amid growing expectations for another rate hike from the Reserve Bank. Markets are pricing in an 86% chance that the RBNZ will raise the official cash rate for a third time to 3% at its meeting on October 28. On Thursday, Chief Economist Paul Conway said the rate decision later this month remains open and that the central bank continues to believe that an increase in the OCR is most likely, although the timing remains uncertain. Meanwhile, data released today showed that New Zealand's electronic retail card spending fell 0.4% month on month in September, while food inflation accelerated to 2.4%, highlighting persistent price pressures. Market attention now turns to next week’s third-quarter inflation data for further clues on the monetary policy outlook. The kiwi has gained 0.3% this week, putting it on track to snap a seven-week losing streak.
2026-10-16
Kiwi Dollar Edges Higher but Remains Near 2025 Lows
The New Zealand dollar rose to $0.561 on Thursday, having fallen to as low as $0.556 overnight, its weakest level since April 2025, after higher-than-expected US CPI data boosted the greenback. The report prompted traders to increase bets on another Federal Reserve rate hike later this month and a further increase in December. Domestically, while the Reserve Bank of New Zealand has resumed its monetary tightening cycle, the official cash rate remains notably lower than interest rates in several major economies, including the US and neighboring Australia, making the kiwi less attractive to yield-seeking investors. The currency has also been weighed down by a still-sluggish economy and ongoing political uncertainty. Investors will now focus on New Zealand’s third-quarter CPI report next week for clues on the interest rate outlook. The report will be the last major data release before the RBNZ’s next meeting on October 28.
2026-10-15
New Zealand Dollar Gains as US Dollar Rally Pauses
The New Zealand dollar edged up to $0.562 on Wednesday, after gaining 0.5% in the previous session and moving further away from a 17-month low of $0.558, as the US dollar’s advance stalled. Investors are now awaiting US CPI data due later today, along with speeches from Federal Reserve officials, for fresh signals on the outlook for interest rates. Despite the rebound, the kiwi remains vulnerable amid New Zealand’s sluggish economy and widening interest rate differentials with other major economies. Although the Reserve Bank of New Zealand raised interest rates at its previous two policy meetings this year, the official cash rate remains below those of several overseas counterparts, reducing the relative appeal of New Zealand dollar-denominated assets to international investors. Political uncertainty ahead of November’s general election also weighed on the currency.
2026-10-14