Breaking: RBNZ raises OCR By 50bp to 3.00% as expected, kiwi pops to 0.6365

FXStreet Team FXStreet

As expected, the RBNZ lifted the Official Cash Rate by 50bp from 2.5% to 3.0% and the statement is signalling further tightening ahead.

NZD/USD has rallied by some 35 pips to a session high of 0.6365.

RBNZ quarterly statement

Conditions need to continue to tighten.
Sees OCR at 3.69% in December this year (up from its previous projection at 3.41%).
Sees OCR at 4.1 in September 2023 (from 3.95%).
Sees OCR at 4.1% in December 2023 (from 3.95%).
Sees OCR at 3.65% in September 2025.
Core consumer price inflation remains too high and labour resources remain scarce.
Range of indicators highlight broad-based domestic pricing pressures.
Agreed that further increases in the ocr were required in order to meet their remit objectives.
Committee agreed that maintaining the recent pace of tightening remains the best means.
Agreed that domestic inflationary pressures had increased since may and to further bring forward the timing of ocr increases.
Resolute in its commitment to ensure consumer price inflation returns to within the 1 to 3 percent target range.
House prices have steadily dropped from high levels since November last year, and are expected to keep falling over the coming year towards more sustainable levels.

Markets will be tuning into Governor Adrian Orr’s press conference later in the day.

About the RBNZ interest rate decision

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 rises the interest rates it is positive, or bullish, for the NZD.

Author

FXStreet Team

FXStreet

Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.

AUD/USD sticks to positive bias above 0.7100; lacks bullish conviction

AUD/USD trades with a positive bias for the second straight day, holding above 0.7100 in the Asian session on Friday as softer US bond yields keep US Dollar bulls on the back foot. Furthermore, hawkish RBA Governor Bullock's comments boost rate hike bets and support the Aussie. However, the Fed's hawkish outlook, along with geopolitical uncertainties, limits USD losses and caps the pair.

USD/JPY approaches 158.00 as Japanese Yen resumes decline

USD/JPY is resuming its upside in the European session on Friday, refreshing two-week highs and nearing 158.00. The Japanese Yen extends losses, despite the Bank of Japan's (BoJ) expected rate hike to 1.25% and hawkish Governor Ueda's comments, as two surprise dissents against the rate hike weigh on it.

Gold keeps the bid tone in place; still below $4,400

Gold adds to the optimism seen in the second half of the week, trading with decent gains just below the $4,400 mark per troy ounce on Friday. The precious metal’s advance finds traction in declining crude oil prices and fresh selling pressure on the US Dollar.

Why altcoin season isn't coming back — and what stole its capital

If, after two years of being frozen in ice, Katara and Sokka woke you up to the crypto market, it would seem like 100 years have passed. With Bitcoin soaring to record highs just over a year ago, everyone expected a routine altcoin season, where investors take profits from the top crypto to chase higher returns in altcoins.

BoJ Recap: Not as hawkish as expected

The BoJ raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks. Governor Kazuo Ueda said the policy phase had changed.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.