The New Zealand dollar rose to $0.591, approaching its highest level in six weeks, as higher-than-expected inflation data reinforced the case for tighter monetary policy. Consumer prices increased 3.1% year-on-year in the first quarter, the same pace as in the previous quarter and exceeding forecasts of a 2.9% rise. The reading remained above the upper end of the RBNZ’s 1-3% target range. Price pressures are expected to intensify further in the second quarter as the full impact of higher energy prices feeds into the data, prompting speculation that the central bank may raise rates sooner than previously signaled. Markets are now fully pricing in a rate hike in July. However, there is some caution given that the economy is only beginning to recover from a prolonged downturn. Separate data showed business confidence slumped in the first quarter, with firms signaling plans to cut investment and reduce staffing as rising costs due to the Middle East war weighed on profits.