In view of Imre Speizer, Research Analyst at Westpac, NZD/USD has had a good run in November, rising almost 4c since the Oct low of 0.6425. Some of that is due to a strong run of economic data (GDP, CPI, jobs), which in turn has raised market expectations of the OCR.
“Market pricing for the OCR has now removed any chance of a near-term rate cut, and is slightly more hawkish than the RBNZ’s own OCR forecast which was kept unchanged at today’s MPS.”
“We suspect market pricing will drift a little higher near term, but will be restrained by the RBNZ’s implicit signal that it will tolerate abovetarget inflation.”
“The more upbeat RBNZ adds to the case for a decent short squeeze over the next few weeks, 0.6850 the next upside target.”
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