New Zealand Dollar Soars as RBNZ Surprises with a More Aggressive Hike, Where to?

policymakers are concerned about inflation being too high and sticking around for too long. They think that the official cash rate needs to be lowered to help bring prices down. Even though the economy has slowed down, there’s still more demand than supply. It’s interesting to note that inflation could get worse in the short term. But on the bright side, the RBNZ says that our financial system is ready for any potential slowdown.
RBNZ has made a move that sets it apart from other big banks. For instance, the Federal Reserve has been slowing down their tightening quite a bit, and the Reserve Bank of Australia has even paused altogether. But the RBNZ’s move, RBA Governor Philip Lowe gave a speech where he emphasized that their pause doesn’t mean they’re done with rate hikes.

traders are still expecting further tightening in the market, with a 70% chance of interest rates going up to about 5.5%. This is actually good news for the NZD, as it puts them ahead of other currencies in terms of yield. So, the NZD might continue to do well in the near future!

US non-farm payrolls report this Friday for NZD/USD. Although stock markets will be closed for the Good Friday holiday, currency markets will still be open. However, it’s important to note that there may be lower trading volume which could lead to unexpected market movements. It’s worth keeping in mind that despite what the central bank has said, the market is still predicting Fed rate cuts this year. If the report is strong, it could change those predictions and cause the US Dollar to rise.