- The dollar is boosted after new high inflation data in the US.
- Higher-than-expected rate hike in New Zealand does not support the kiwi.
- NZD/USD worsens the picture, aims to test March bottom of 0.6727.
NZD/USD extended the decline to 0.6750, marking a new low in almost a month after the US wholesale inflation data. The pair is falling significantly, despite the RBNZ rate hike, in the middle of a general strength of the US dollar.
RNBZ rises do not boost the kiwi
At Wednesday’s start, the Reserve Bank of New Zealand (RBNZ) announced a benchmark interest rate hike of 50 basis points to 1.50%, which came as a surprise as a 25 point increase was expected. Analysts at TD Securities expect the RBNZ to rise again by 50 points in May, and then rise in July, August, October and November by 25 points, ending at 3% by the end of the year.
Despite the surprise rise, the Kiwi was not favored. After an initial jump, he not only fell against the dollar, but also against other currencies such as the aussie. AUD/NZD dipped to 1.0825, but only to bounce back significantly and rally to 1.0955, the highest level since August 2020.
The dollar For its part, it was favored after the wholesale inflation data. The PPI rose from 10.3% to 11.2% (annual), higher than expected. DXY rises for the ninth day in a row.
The climate of caution in the stock markets also contributes to the strength of the dollar, between the continuation of the war in Ukraine, the monetary adjustments and the start of presentations of corporate results.
Technical levels
Source: Fx Street
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