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29 Jan 2014
NZD/USD shows some uncertainty ahead of RBNZ decision
FXstreet.com (London) - NZD/USD showed some early gains over the Asia session on a broad risk-supportive trade, thanks to the Central Bank of the Republic of Turkey’s aggressive rate hike. The CBRT hiked rates by 425 basis points to 12 percent, easing contagion fears over the runaway lira. However the Kiwi dollar then declined overnight on uncertainty over the Reserve Bank of New Zealand’s announcement due today.
March hike more likely
While there is some expectation that the central bank will move to hike the overnight cash rate from its current 2.5 percent, it is more likely that RBNZ governor Graeme Wheeler will instead set out plans to begin the tightening cycle in March.
NZD/USD hit a high of USD0.8304 on an early risk rally before declining to a current price of USD0.8272, up slightly from a low of USD0.8269, but expect some choppy trading through the day ahead of both the FOMC tapering decision and the RBNZ rate announcement.
March hike more likely
While there is some expectation that the central bank will move to hike the overnight cash rate from its current 2.5 percent, it is more likely that RBNZ governor Graeme Wheeler will instead set out plans to begin the tightening cycle in March.
NZD/USD hit a high of USD0.8304 on an early risk rally before declining to a current price of USD0.8272, up slightly from a low of USD0.8269, but expect some choppy trading through the day ahead of both the FOMC tapering decision and the RBNZ rate announcement.