Breaking: NZD/USD is volatile on RBNZ hawkish 75Bp hike
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.
NZD/USD update
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.
Author
FXStreet Team
FXStreet
