The Reserve Bank of New Zealand has forecasted a higher peak cash rate and has hiked rates by 75 basis points as expected. The knee-jerk was volatile in forex seeing the Kiwi rally, drop and then rally again as the statements were digested.
RBNZ key takeaways
The nuts and bolts are hawkish, putting a bid into the Kiwi:
RBNZ sees New Zealand economy entering recession in mid-2023.
Sees cash rate rising to higher peak of 5.5% in 2023.
Hikes official cash rate 75bps as expected to 4.25%.
Monetary conditions need to tighten further.
Members agreed that this level had increased since the time of the august statement.
Members agreed OCR needed to reach a level where it was confident it would reduce actual inflation to within the target range.
100 Bps was considered.
Resistance is at the November 18 high at 0.6207 with a break targeting 200-day MA at 0.6310:
(H1 and daily charts)
About the RBNZ interest rate decision and rate statement
The RBNZ interest rate decision is announced by the Reserve Bank of New Zealand. If the RBNZ is hawkish about the inflationary outlook of the economy and raises the interest rates it is positive, or bullish, for the NZD. The RBNZ rate statement contains explanations of their decision on interest rates and commentary about the economic conditions that influenced their decision.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.