The New Zealand Dollar climbed to an honourable 0.7030 early week against the US Dollar (USD), the first time we have seen prices in the 0.70’s since November 2021. The kiwi extended the bull trend from the low of 0.6530 at the end of 2021 trading. However, the 70 handle broke down reversing to Fridays 0.6880 in the wake of the Federal Reserve news. The chart shows we could still see further upside in the NZD as the RBNZ ramps up interest rates in the coming months. Fed chairman Powell signalled the Federal Reserve would be raising interest rates this year from the March 2020 near zero mark in efforts to cool the hottest inflation in decades. They will shrink the size of their balance sheet by 95B per month. Consensus shows many of the fed officials would have preferred to raise the rate on March 17th by half a percent over the quarter rise. We may see as much as 6 more rises in 2022 with Powell suggesting we may see a 0.5% rise in the next May meeting could be necessary. We prefer upside moves over the next few days in the cross.
The current interbank midrate is: NZDUSD 0.6882
The interbank range this week has been: NZDUSD 0.6872- 0.7031