Kiwi strengthens on RBNZ Governor Orr

By Gustavo Nils Nov29,2023

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The New Zealand (NZ) dollar has recently rallied due to a weaker US dollar and a hawkish Reserve Bank of New Zealand (RBNZ) interest rate decision. RBNZ Governor Orr made some key statements that reflected a hawkish and authoritative tone regarding the inflation expectations and global interest rates. The NZD/USD daily price action points to a recent upside correction, reaching overbought territory on the RSI.

USD fell sharply after one of the Fed’s most prominent hawks, Fed’s Williams, shifted to a less aggressive tone. He hinted at possible rate cuts if inflation continues to fall. Implied Fed funds futures showed a dovish repricing of roughly 25bps of cumulative rate cuts by December 2024. US Treasury yields extended their decline across the curve. Later today, US GDP, additional Fed speakers and the Fed’s beige book will come into focus ahead of tomorrow crucial core PCE print (Fed’s preferred measure of inflation).

Currently, from a technical analysis standpoint, some NZD weakness is expected despite the recent upside on the NZD/USD daily chart. The 0.6200 psychological resistance handle could be a turning point. It is recorded that the IG Client Sentiment data is bearish, reflecting a bullish NZD/USD.

The article also discusses the RBNZ interest rate probabilities, technical analysis, and the relevant economic calendar providing essential information on the important market-moving events. All in all, the article provides a comprehensive insight into the factors affecting the New Zealand dollar.

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