NZD/USD closed above 0.62 for the first time since 25 August. Economists at DBS Bank expect the pair to struggle at the 0.6270 resistance. 

RBNZ says overnight cash rate needs to hit 5.5%

“The Reserve Bank of New Zealand delivered the 75 bps hike expected by consensus. With the official cash rate at 4.25% and above the 4.1% terminal rate projected in August, the RBNZ now sees more hikes to 5.5% in 2023.”

“Unlike the US, inflation has yet to show signs of peaking in New Zealand. RBNZ reckoned CPI inflation could rise further to 7.5% over the next couple of quarters from 7.2% in September. RBNZ also played down the 11.5% fall in house prices from its November 2021 peak, citing the 15% rise in household wealth since end-2020. However, the central bank did not mind a recession to return inflation to its 1-3% target.” 

“Kiwi may find resistance at its 50% Fibonacci retracement level of around 0.6270.”

 

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