NZD/USD near One Month High at 0.84

New Zealand’s dollar rose to a one-month high after data showed inflation accelerated at the fastest pace in two years, fanning speculation the central bank will raise borrowing costs.

Two-year interest rate swaps reached the highest since 2011 as traders are almost certain that the Reserve Bank of New Zealand will raise the official cash rate from 2.5 percent by June, according to data compiled by Bloomberg. The Australian dollar held a five-day gain after meeting minutes yesterday from the nation’s central bank showed that policy makers refrained from saying a weaker currency would help the economy.

“Because of the resilient economy and inflation concerns,” markets are expecting a rate increase in New Zealand, said Kengo Suzuki, the chief currency strategist in Tokyo at Mizuho Securities Co., a unit of Japan’s third-biggest financial group by market value. “New Zealand is almost the only developed country with a rate increase coming into sight, so the kiwi is likely to remain strong.”


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