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10:57 AM · 9 February 2024

Chart of the day: NZDUSD (09.02.2024)

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The New Zealand dollar is currently the best performing currency following ANZ's bamli forecast of an interest rate hike by the RBNZ at the bank's next meeting on 28 February, as well as at its next meeting on 10 April. 

ANZ chief economist Sharon Zollner said today that she expects the RBNZ to raise the official cash rate this month and in April by a total of 50 basis points, raising the official rate to 6.0%. The RBNZ warned in November that "if inflationary pressures were stronger than expected, the OCR rate would likely need to rise further". Data since then has been a series of small but fairly consistent surprises in that direction, Zollner added.

The hawkish comments from ANZ bankers have strengthened the New Zealand dollar in the FX market and the currency is currently leading the broad market. 

Relative to yesterday's session, the implied path of interest rates points to a more hawkish stance from the RBNZ. Source: Bloomberg Financial LP 

At the moment, the money market is assuming that the RBNZ will raise interest rates by 25 basis points in February with a 44% probability. Source: Bloomberg Financial LP  

The NZDUSD pair is gaining close to 0.82% today and has broken out above the local maxima of the consolidation zone near the January/February 2024 peaks and the 50-day exponential moving average. Source: xStation

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