NZD/USD bulls looking to the RBNZ to hike
|- NZD/USD traders are bracing for volatility this week around the RBNZ.
- NZD/USD is picking up some of the demand lost for the US dollar.
NZD/USD has opened on Monday where it left off on Friday on an important week for kiwi traders in anticipation of the Reserve Bank of New Zealand.
The US yield and the US dollar was hammered on Friday on terrible data which supported the commodity complex and the proxy currencies such as the CAD, AUD and NZD.
A survey showed US consumer sentiment dropped sharply in early August to its lowest level in a decade.
The fall was one of the six largest drops in the past 50 years of the survey. The dollar index DXY, which measures the greenback against a basket of six rivals, was 0.4% lower at 92.523, its lowest since Aug 6.
NZD/USD is now moving in on recent highs on a week that could bring in plenty of volatility in the bird as traders await the RBNZ's interest decision.
''This week is set to be volatile locally,'' analysts at ANZ Bank said with respect to the RBNZ noting that the market pricing is split roughly 80/20 in favour of a 25bp hike over a 50bp one.
''The RBNZ’s tone will also matter; given COVID developments in Australia, which highlight just how quickly things can change, caution is likely. Brace for volatility.''
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