The New Zealand dollar fell to $0.576, hovering at its lowest level in nearly two weeks, despite data showing stronger-than-expected economic growth. GDP grew by 1.1% in the September quarter after a 1% contraction in the previous period, coming above market expectations of a 0.9% increase and the Reserve Bank’s estimate of a 0.4% rise. Despite the strong outcome, significant spare capacity remains in the economy, suggesting the renewed growth is unlikely to fuel inflation over the coming year. This has reduced expectations of an imminent rate hike. Investors now assign a 40% probability to a rate increase by July next year, down from around 50% before the data was released. RBNZ Governor Anna Breman this week also pushed back against rate hike expectations, saying that rates are likely to remain at current levels through 2026. She also noted that financial market conditions have tightened beyond the bank’s projections.