The New Zealand Dollar (NZD) retraced previous losses against the US Dollar (USD) on Monday and trades higher for the fourth consecutive day, approaching three-week highs near 0.5800. Hopes of further tightening by the Reserve Bank of New Zealand (RBNZ) and moderate US Dollar weakness have offset the negative impact of the risk-off market mood.
Further escalation of US-Iran hostilities and the closure of the Strait of Hormuz have soured investors’ sentiment at the week’s opening, although the impact on the Kiwi has been marginal so far.
The Kiwi Dollar keeps trading on a firm pace following a “hawkish hike” by the RBNZ last week. The central bank hiked the Official Cash Rate (OCR) by 25 basis points, to 2.5%, and hinted at further tightening down the road. RBNZ Governor Anna Breman observed a rebound in economic growth while inflationary trends remain at high levels amid the energy shock from Iran’s war. In this context, the committee estimated the current OCR is still accommodative, which points to more rate hikes in the coming months.
The US Dollar, on the other hand, has failed to draw support from the risk-averse market, as investors await the release of the US Consumer Price Index (CPI) report, due on Tuesday, and the Testimony of the recently appointed Federal Reserve (Fed) Chairman Kevin Warsh to the US Congress, for further insight about the central bank’s monetary policy plans.
Before that, Fed Governor Christopher Waller will meet the press later on Monday, while on Tuesday, Trade Balance figures from China might have some impact on the New Zealand Dollar. China is New Zealand’s main trading partner, and, in that sense, Chinese data tends to act as a forward-looking indicator for New Zealand’s economic growth.
Economic Indicator
Consumer Price Index (YoY)
Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as The Consumer Price Index (CPI). CPI data is compiled on a monthly basis and released by the US Department of Labor Statistics. The YoY reading compares the prices of goods in the reference month to the same month a year earlier.The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Economic Indicator
Fed Chair Warsh testifies
Kevin Warsh took office as chairman of the Board of Governors of the Federal Reserve in May 2026, for a four-year term ending in 2030. His term as a member of the Board of Governors will expire in May 2040. Warsh, born in Albany (New York) on April 13, 1970, is an American financier and attorney who already served as a member of the Fed Board of Governors from 2006 to 2011 and was significantly involved in the central bank’s response to the financial crisis. Before that, he served as a special assistant to the president for economic policy and the executive secretary of the National Economic Council under President George W. Bush.
Next release:
Tue Jul 14, 2026 14:00
Frequency:
Irregular
Consensus:
–
Previous:
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Source:
Federal Reserve
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