NZD/USD Stays Around 0.8330 as Inflation Fans Rate Bets

New Zealand’s dollar remained higher following a gain yesterday after the nation reported accelerating inflation, bolstering the case for its central bank to raise interest rates.

Traders saw a 63 percent chance that the Reserve Bank of New Zealand will increase the official cash rate by a quarter percentage point to 2.75 percent at a policy meeting on Jan. 30, according to data on overnight-index swaps compiled by Bloomberg. Australia’s dollar gained against most of its major peers as stocks rose and money-market rates dropped in China.

“The view is that the RBNZ was looking for an excuse to maybe start the tightening cycle as early as next week, then maybe this headline increase would give them the excuse to do that,” Ray Attrill, the global co-head of currency strategy at National Australia Bank Ltd. in Sydney, said of market bets on a rate increase. “That’s the reason that the New Zealand dollar has jumped up on the numbers.”

Bloomberg

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.