NZD/USD to find support from RBNZ guidance on more aggressive rate path – MUFG
|The New Zealand dollar is the top performing G10 currency today and is a response to the Reserve Bank of New Zealand (RBNZ) meeting. The RBNZ signalled the need for more aggressive action going forward, which should provide support for the kiwi, according to economists at MUFG Bank.
RBNZ signals higher peak in rates
“Official policy rate was raised as expected by 25bps to 1.00%. We thought there was a high risk of the RBNZ moving 50bps today and the RBNZ did acknowledge that the decision was a close call and that in the future they would not hesitate to move in larger increments if required.”
“The OIS market was already implying a policy rate of around 2.50% prior to today’s meeting and the guidance today has encouraged the market to expect an even higher rate as investors remain wary of central banks possibly being behind the curve and having to do more. That will likely keep NZD well supported over the short-term.”
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.