The New Zealand Dollar (NZD) improved to 0.6370 (1.5700) midweek on poor risk sentiment against the Euro (EUR) before losing gains to 0.6240 (1.6020) Friday post RBNZ rate announcement. The New Zealand Central bank hiked their interest rate to 1.5% from 1.0% – analysts were split on a 0.25% or 0.50% rise. The 50-point move is the first half a percent rise since November 1999 aimed at bringing down an overheating inflation expected to grow to over 7.0% in this cycle. The war in Ukraine entered its 50th day of fighting- the Ukrainian president Zelenskiy saying unless their fighters receive more weapons the war will become an “endless bloodbath” .. the Ukrainian fighters have defended their country far longer than the Russian army had anticipated. Overnight German and Eurozone economic sentiment came in poor two months in a row with the read similar to conditions at the beginning of covid in March 2020. We expect the kiwi to kick back based on overbought EUR conditions heading through tonight’s ECB policy statement and rate release.
The current interbank midrate is: NZDEUR 0.6247 EURNZD 1.6007
The interbank range this week has been: NZDEUR 0.6230- 0.6372 EURNZD 1.5693- 1.6049