New Zealand dollar eyes RBNZ

The New Zealand dollar is finally in positive territory on Tuesday, after posting five consecutive losing sessions.

RBNZ rate decision looms

The RBNZ is widely expected to increase rates from the current 1.00% at the Wednesday meeting, but by how much? Pundits are calling the rate decision a “coin toss” between a 0.25% and a 0.50% increase. Most analysts expect a 0.25% move, but the markets are clamouring for a super-size 0.50% move, given soaring inflation. If investors don’t get the 0.50% move, we could see the New Zealand dollar take a tumble. With the RBNZ well into its rate-hike cycle, the markets will be combing through the rate statement, with the expectation that the Bank will be hawkish in its forward guidance.

The central bank finds itself caught between a rock and a hard place ahead of this key rate decision. There is strong pressure to contain inflation, which could hit 7%, and the most effective inflation-busting tool is one or more 0.50% rate hikes. At the same time, a sharp rise in interest rates could cause the economy to stall and result in a recession. With the unexpected Ukraine war causing plenty of turbulence in the markets and consumer and business confidence at low levels, the RBNZ has good reasons to avoid a 0.50% hike.

NZIER Business Confidence dropped sharply in Q1, falling from -28 to -40. The retail sector was particularly pessimistic, as the Omicron wave caused many consumers to stay home, even with relaxation in health restrictions. The survey found that businesses are concerned about spiralling inflation and expect the RBNZ to continue raising interest rates. As well, businesses are struggling with continuing labor shortages. It’s not a pretty picture, and the survey found that firms plan to scale back on investment due to the heightened uncertainties facing businesses.


NZD/USD Technical

  • There is resistance at 0.6902, followed by 0.6980
  • NZD/USD has support at 0.6769 and 0.6691


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 Visit to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.