NZD/USD Price Analysis: RBNZ in focus, bears are engaged
23.05.2023, 21:13

NZD/USD Price Analysis: RBNZ in focus, bears are engaged

  • NZD/USD bears are testing key support. 
  • RBNZ is the focus with rate rises on the way. 

NZD/USD  is trading around 0.6240 in a phase of consolidation but under pressure. Global equities slid on Tuesday as talks over the US debt ceiling continued without resolution. We also have yields on one-month US Treasury bills running into a record high. Rising yields and a stronger US Dollar pressured the high beta NZD.

´´The Kiwi is lower this morning, having followed equities down overnight, with newswires attributing the equity rout to a lack of progress on the US debt ceiling and the US Treasury asking agencies if they have capacity to delay payments (demonstrating how down to the wire it is),´´ analysts at ANZ Bank explained.

´´The US does benefit from safe-haven buying in such instances, and that makes sense, recalling that other than the NZD, no other currency has a higher cash rate. So, expect volatility as this issue percolates, the analysts added.

RBNZ in focus

´´Today is of course all about the RBNZ. We expect a 25bp hike but wouldn’t at all be surprised to see 50bp. But what we think matters most given the focus on carry is where the OCR peaks in the RBNZ’s projections. Anything with a 6-handle is likely to be NZD-supportive, global issues notwithstanding,´´ the analysts explained. 

 

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