New Zealand Dollar: RBNZ pause limits Kiwi gains – Commerzbank
Commerzbank’s Norman Liebke notes that the Reserve Bank of New Zealand (RBNZ) surprised markets by holding at 2.75%, even as it signalled further hikes will likely be needed.
The Reserve Bank of New Zealand (RBNZ) surprised markets by maintaining its policy rate at 2.75% during a meeting, despite signaling that further hikes will likely be necessary. Norman Liebke of Commerzbank predicts limited medium-term upside for the New Zealand Dollar (NZD), arguing that market expectations of four hikes by September are overly hawkish and will need to be adjusted.
The RBNZ's decision was a close vote, 4-3, but the central bank made it clear that further rate hikes are expected in the future. Despite the pause in rate hikes at this meeting, the NZD temporarily weakened by 1.6% against the USD, reaching nearly 0.56. Experts believe the Kiwi will likely weaken further as market expectations are pared back, but they also consider current Fed rate hike expectations to be too hawkish, which may limit the extent of NZD depreciation.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
- FX weekly: Dollar slips weekly as Yen leads major currency gains seekingalpha.com
