NZD/USD fell 0.6% after the RBNZ said it expects inflation to return to the 1-3% target range in the second half. The RBNZ is also diverging from the RBA, where markets still see a risk of another rate hike due to persistent inflation, notes Chang Wei Liang, FX and Credit Strategist at DBS.
An RBNZ rate cut in August is increasingly likely
“NZD/USD fell 0.6% after the RBNZ surprised markets by saying it expects inflation to return to the 1-3% target range in the second half, adding that it could ease monetary tightening with inflation easing. Markets are now pricing in a 44% chance of a rate cut in August.”
“The RBNZ is also diverging from the RBA, where markets still see a risk of another rate hike due to persistent inflation. AUD/NZD has jumped towards 1.11, supported by widening short-term rate differentials between AUD and NZD.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
