NZD/USD: Vulnerable to disappointment unless RBNZ signals further larger 50bps hikes – MUFG
|NZD/USD has risen back above the 0.6450 level ahead of the Reserve Bank of New Zealand (RBNZ) policy meeting. However, economists at MUFG Bank expect the kiwi to remain under pressure unless we see a hawkish policy update.
Fundamental case for further policy tightening remains compelling
“The performance of the New Zealand dollar in response to this week’s policy meeting will likely depend upon whether the RBNZ signals that further larger 50bps hikes are likely at upcoming policy meetings. Without such a hawkish policy signal, the kiwi is vulnerable to disappointment.”
The fundamental case for further policy tightening in New Zealand remains compelling. The latest CPI and labour market reports both continued to reveal building inflation pressures. In particular, average hourly earnings have recorded their strongest rate of increase over the last two quarters to Q1 since Q3 2006. It keeps pressure on the RBNZ to keep tightening policy.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.