The New Zealand dollar edged up to around $0.577 on Thursday but remained near its lowest level in over two months as investors digested the latest GDP data. New Zealand's economy grew 0.8% in the March 2026 quarter, following a 0.5% expansion in the previous quarter but missing the Reserve Bank of New Zealand's 1.0% forecast. Annual GDP rose 1.5%, beating market expectations of a 1.1% rise. Although the figures suggested a strengthening recovery, they largely reflected economic conditions before the escalation of the Middle East conflict, which is expected to have weighed on activity. Forecasts now show GDP to barely grow or even contract in the second quarter. Still, traders are assigning a 70% chance to a 25-basis-point rate hike in July, as the RBNZ already indicated tightening to keep inflation expectations anchored, though swap pricing now imply only two rate increases this year rather than the three previously anticipated.