Both the New Zealand Dollar (NZD) and British Pound (GBP) strengthened against the US Dollar (USD) during the early Asian session on Thursday, as traders focused on the upcoming US Producer Price Index (PPI) inflation data. The NZD/USD pair rose to around 0.5845, supported by a softer USD, while GBP/USD extended its winning streak for the fifth consecutive day, trading near 1.3540 [1][2]. Market participants are closely watching the US PPI data due Thursday and the Consumer Price Index (CPI) data on Friday, as these reports are expected to influence the Federal Reserve's monetary policy decision at its meeting scheduled for September 14-15 [1][2].
Economists expect the headline US PPI to rise by 5.3% year-over-year in August, with the core PPI projected to increase by 4.6% [1]. According to Elias Haddad at Brown Brothers Harriman & Co., a stronger-than-expected CPI print would likely confirm a September rate hike and support a firmer dollar, while a cooler reading could strengthen the case for a hold and leave the dollar vulnerable to a dovish repricing [1]. The CME FedWatch Tool indicates that traders are pricing in about a 60% chance of a rate hike at the upcoming Federal Reserve meeting, following recent strong US jobs data [2].
In New Zealand, the Reserve Bank of New Zealand (RBNZ) recently raised the Overnight Cash Rate (OCR) by 25 basis points to 2.75%, as expected, and signaled a gradual removal of monetary stimulus to return inflation to target [1]. The RBNZ emphasized that the future rate path is not pre-determined and will depend on inflation persistence and economic recovery strength [1]. Economists widely anticipate at least one more rate hike by the RBNZ before year-end, likely in December [1]. Technical analysis shows NZD/USD holding above its 100-day moving average at 0.5843, with subdued downside momentum [1].
For the UK, the RICS UK Residential Market Survey showed the house price balance improved to -28% in August 2026 from -29% in July, reaching a five-month high and indicating early signs of market stabilization, though prices are still expected to decline over the next three months [2]. Strategists at Scotiabank note that while the Pound has firmed, the short end of the UK rates curve remains cautious, with markets pricing in only incremental Bank of England (BoE) tightening—about 17 basis points for November 5th and a cumulative 32 basis points by December 17th [2]. This suggests investors expect gradual BoE moves rather than an imminent policy shift [2].
CONCLUSION
The NZD and GBP both gained ground against the USD as markets await key US inflation data that could shape the Federal Reserve's next policy move. While both the RBNZ and BoE are expected to tighten policy further, the pace is seen as gradual and data-dependent. Market sentiment remains cautious, with traders closely monitoring upcoming inflation releases for further direction.