Forex Today: Hawkish RBNZ In Record Rate Hike
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The RBNZ hiked rates by 0.75% to their highest level since 2008 at 4.25% and increased their forecast of a forthcoming recession and peak rates at 5.50% next year.
- As had been widely expected, the Reserve Bank of New Zealand raised its interest rate by a strong 0.75%, taking its official cash rate to 4.25%, the highest seen since 2008 and the highest rate of any major currency. The RBNZ also increased its forecast of its maximum OCR in the near term to 5.50% in 2023, while also forecasting a year-long recession which will begin in the middle of 2023. The RBNZ has never made a hike of 0.75% before. Overall, this is seen as a bit of a hawkish tilt and seems to have spurred the Kiwi to minor gains against the Australian Dollar in the AUD/NZD currency cross (which has reached its lowest level since March), and against the Japanese Yen in the NZD/JPY cross.
- The minutes of the most recent FOMC meeting will be released later today.
- There will be releases today of manufacturing and services PMI data from the UK, Germany, and France.
- In the Forex market, the New Zealand Dollar is the strongest major currency over the short term, while the Japanese Yen and the Australian Dollar are the weakest.
- Daily new global coronavirus cases remained steady last week, maintaining a downward trend that began last July.
- It is estimated that 68.4% of the world’s population has received at least one dose of a coronavirus vaccination.
- Total confirmed new coronavirus cases worldwide stand at over 643.9 million with an average case fatality rate of 1.03%.
- The rate of new coronavirus infections appears to now be significantly increased only in China, Japan, the Solomon Islands, and Venezuela.
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