The US Dollar (USD) has been hit hard this week as risk conditions improved, however the safe haven buy may come back into play at some point together with the Federal Reserve signalling further interest rate rises. Today and through to the close of the week should be thin trading on account of the US Holiday break. The New Zealand Dollar (NZD) rose to 0.6285 early today in the aftermath of the RBNZ raising rates 0.75% to 4.25% the highest it’s been since December 2008 -GFC. Governor Orr resolute with his decision to keep raising rates hard until signs of a slowing inflation are seen. It’s a fine line between tipping the country into recession by strangling growth. It’s arguable the RBNZ should have done more earlier. With wage growth yet to really filter through, we could yet see NZ inflation go higher than the current 7.2% putting more strain on interest rates and ultimately consumer pockets. The kiwi may retest 0.6450 resistance over the coming days.
The current interbank midrate is: NZDUSD 0.6259
The interbank range this week has been: NZDUSD 0.6083- 0.6289