SYDNEY: The New Zealand dollar rose on Wednesday after the country’s central bank hiked interest rates as expected and warned it would have to bring forward future tightening to head off inflation, a hawkish outcome that hammered bonds.

The kiwi dollar firmed 0.2% to $0.6356 and away from the week’s low of $0.6318, but met resistance above $0.6380.

The Australian dollar lagged behind at $0.7001 after wage data missed forecasts and led the market to lengthen the odds on another half-point rate hike in September.

In contrast, the Reserve Bank of New Zealand (RBNZ) not only raised its cash rate (OCR) by 50 basis points to 3.0% but also lifted its projection for the peak in rates to 4.1% from 3.9%.