NZDUSD Rises After RBNZ Raises Rates

New Zealand dollar NZDUSD +1.53%  rose to 86.80 U.S. cents from 86.11 U.S. cents late Wednesday, hitting the highest level since May 6. The Reserve Bank of New Zealand on Thursday hiked its benchmark interest rate to 3.25% from 3%. The RBNZ said it expects the economy to grow by around 4% in the year to June, as there is “considerable momentum” behind the economic expansion, and expects inflationary pressure to increase. The central bank said the “speed and extent” of future rate hikes will depend on data and how it impacts inflation expectations.

“What really sent the Kiwi higher was the signal that there may be no pause in the cycle, as many, including ourselves, thought possible as early as next month,” said Marc Chandler, global head of currency strategy at Brown Brothers Harriman in a note, referring to interest-rate hikes.

via MarketWatch

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza