The NZD/USD pair gained 0.80% to 0.7082 and the AUD/USD pair rose 0.36% to 0.7556
The dollar was lower on Tuesday morning in Asia. However, the New Zealand dollar rose on expectations for an earlier-than-expected interest rate hike after a business survey in the country showed a rise in business confidence.
The U.S. Dollar Index was 0.28% lower at 92.157 by 4:52 AM GMT.
The NZD/USD pair gained 0.80% to 0.7082 and the AUD/USD pair rose 0.36% to 0.7556.
The USD/JPY pair inched down 0.11% to 110.84 while the USD/CNY pair edged up 0.01% to 6.4635.
The GBP/USD pair added 0.25% to 1.3880, with the U.K. set to end social distancing in England from Jul. 19.
The New Zealand Institute of Economic Research (NZIER) business confidence index jumped from Q1’s 13% contraction to 7% growth in Q2 2021. The sharp improvement also prompted ASB Bank to pull forward interest rate hike expectations to November 2021.
It is very clear that record amounts of monetary stimulus are no longer needed to support the economy and inflation risks are getting too high for comfort. We now expect the Reserve Bank of New Zealand (RBNZ) to start lifting the official cash rate from November 2021 instead of the previous May 2022, ASB senior economist Jane Turner in a note.
Should RBNZ hike rates in November as predicted, it would join Norges Bank, which out of the G10 central banks is alone in forecasting a hike in 2021.
In Australia, the Reserve Bank of Australia (RBA) kept its interest rate unchanged at 0.10% as it handed down its policy decision earlier in the day. The RBA has previously said that it would keep rates unchanged until 2024, and the New Zealand dollar hit a one-month high against the Australian dollar ahead of the decision.
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