FX News

NZD/USD Conversion:

The New Zealand Dollar (NZD) has suffered losses against the US Dollar (USD) for 7 straight weeks in a row coming from 0.6570 and drifting to 0.6125 in the last hour. Consolidating around this zone we wonder for how long with massive uncertainty poisoning market sentiment of late. The New Zealand Central Bank (RBNZ) raised its benchmark interest rate yesterday by 50 points to 2.50%, the third consecutive time as efforts to bring down 2-decade high inflation ramps up. RBNZ governor Ore said more interest rate rises were in store. Employment remains at its maximum sustainable level of 4% with the bank saying there were still upside risks to inflation and a downside bias to growth over the next couple of years. The target inflation rate remains at 1-3% and will tighten at pace until they feel satisfied that measures were working. Indications by the RBNZ were that the rate would peak at around 4.0% in mid-2023. Markets were monitoring any comments around the potential lowering of this “peak”, but movement post release was benign. Meanwhile, US Inflation printed overnight with yet another massive rise from May’s 8.6% to June’s 9.1%, the fastest pace in more than 40 years which will end any argument of whether the Fed will raise rates 50 points or 75 points at their next meeting. Fed officials had already said a 75 point move higher would be appropriate. This data should tip the US economy into recession. Buying the US Dollar on spikes looks the sensible decision as kiwi risk remains.

The current interbank midrate is: NZDUSD 0.6116
The interbank range this week has been: NZDUSD 0.6080- 0.6191

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