NZD/USD will struggle to overcome the 0.6270 barrier – DBS Bank

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NZD/USD closed above 0.62 for the first time since August 25. DBS Bank economists expect the pair to go higher to face the resistance zone at 0.6270.

The RBNZ says the rate should hit 5.5%

“The Reserve Bank of New Zealand (RBNZ) applied a 75 basis point hike, expected by consensus. With the official cash rate at 4.25% and above the terminal rate of 4.1% projected in August, the RBNZ now sees further rises to 5.5% by 2023.”

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“Unlike in the US, inflation has yet to show signs of peaking in New Zealand. The RBNZ estimates that CPI inflation could continue to rise to 7.5% over the next two quarters, from 7.2 % September The RBNZ also downplayed the 11.5% drop in house prices from its November 2021 peak, citing the 15% rise in household wealth since the end of 2020. However, the bank Central did not mind a recession to bring inflation back to its 1-3% target.”

“The kiwi may find resistance at its 50% fibonacci retracement level around 0.6270.”

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Source: Fx Street

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