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NZD/USD rallied to a high of 0.6236 on Wednesday, from the 0.6123 low. The pair was getting closer to its strongest levels in nearly three months after the RBNZ decided a supersized 75 basis point rate hike to get ahead of inflation.
The latest RBNZ’s rate hike has been the largest since 1999 and brought the policy rate to a 14-year high of 4.25%.
In the statement, it was explained that the central bank’s board expects the cash rate to peak at 5.5% in September 2023 according to its latest forecasts.
The members of the board had considered a 100Bp rate rise which fueled the rally in the bird. Stubbornly high inflation and near-record-low unemployment in New Zealand supported the case for a more aggressive move.
The US Dollar sold off on Wednesday in the early New York trade on the back of PMI’s that are giving the bears a head start before the FOMC minutes are released. The overall data, for the most part, was solid but the emphasis was put on the shocking result in the US Manufacturing PMI that missed expectations.
