NZD/USD: More OCR hikes speak of a higher kiwi – ANZ
|The Kiwi has recovered from yesterday’s dip. NZD/USD trades at fresh multi-week highs and is up nearly 1%. Rapidly rising expectations for more OCR hikes are set to underpin the New Zealand dollar, economists at ANZ Bank report.
The RBNZ is at the front of the pack in the global monetary tightening phase
“Given some of the themes ripping through global markets like stagflation, tapering and spiraling energy prices, more volatility is likely.”
“The rise in inflation will keep the RBNZ at the beginning of the pack in this hiking cycle, which should cement rather than question its commitment to low and stable inflation, and growing market expectations of more OCR hikes will likely help rather than hinder the NZD.”
“There is no talk of letting inflation run, and temporarily high inflation shouldn’t weigh on the NZD.”
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