- NZD/USD surged to its highest mark since January.
- The pair surged after the latest interest rate decision by the Reserve Bank of New Zealand.
- The bank kicks off a quantitative tightening program.
NZD/USD pair saw upticks on Wednesday’s early sessions following the Reserve Banks of New Zealand (RBNZ)’s interest rates decision. It trades around 0.6761, the asset’s highest mark since 20 January. It rose by roughly 3.6% from its lowest zone this year.
RBNZ Decision on Interest Rate
New Zealand sees its economy flourishing as the nation sees increased demand. Latest data highlights that most industries are on remarkable performances. For instance, the unemployment rate declined to pre-pandemic zones as retail sales saw continued surges.
Moreover, the latest PMI numbers suggest services and manufacturing sectors enjoy impressive performances. The situation will be better when the nation re-opens borders within the upcoming weeks. New Zealand sees inflationary pressure as energy cost rises, similar to most countries.
The RBNZ ended its meeting early on Wednesday, delivering a hawkish move. The back decided to increase the interest rate once more. That way, the headline rate moved to $1, touching the highest zone since the pandemic began.
Another update was on RBNZ’s QE (quantitative easing) program. The bank stated it would begin QT (quantitative tightening) by reducing LSAP (Large Scale Asset Purchase) gradually. The bank will accomplish that through managed sales and bond maturities.
The bank commented on inflation. It stated that high oil prices, supply shortfalls, and increasing transport costs accentuate inflation surges. It added that immediate price actions risk generalized price surges according to the ongoing domestic capacity constraints.
RBNZpair saw mild movements as the Reserve Bank of New Zealand presented a hawkish decision. That is because the bank’s decision matched analysts’ expectations.
According to the 4hr chart, NZD/USD saw massive bullish bias within the previous few weeks. The pair climbed to today’s peak of 0.6761 from the YTD lows of 0.6527. That had the asset moving past the 61.8% FIB retracement area. Also, NZD/USD climbed beyond the 25- and 50-day MAs. For now, the pair can keep climbing as bull’s eye the following resistance area of 0.6800.