FX.co ★ New Zealand Dollar Falls Back

The New Zealand dollar slipped to around $0.571 on Friday, retreating toward a ten-week low after a 0.3% gain in the previous session, as a stronger US dollar continued to pressure the currency. The greenback hovered near a seven-week high after the Federal Reserve raised interest rates and signaled further tightening ahead, overshadowing support from stronger-than-expected domestic data.

New Zealand’s second-quarter GDP growth beat forecasts, indicating a measure of resilience in economic activity despite the severe energy shock stemming from the US–Iran war. In addition, the country’s trade deficit narrowed more than expected in August, as export growth outpaced the rise in imports.

Meanwhile, markets are pricing in a 65% probability that the Reserve Bank of New Zealand will lift its cash rate again to 3.0% at its October meeting. The kiwi was down about 1.6% for the week, on track for its fourth consecutive weekly decline.