Kiwi Keeps Losing Altitude Ahead Of RBNZ Policy Review

NZD/USD extended its losing streak to four consecutive days on Monday, showing continued weakness in the wake of the formation of a shooting star candlestick a week ago. Softer oil prices weighed on commodity-tied FX, sapping strength from the kiwi.

• The rate last deals at $0.6828, little changed on the day. Losses past the 50% retracement of the Jan 28 - Apr 5 rally at $0.6782 would encourage bears to target $0.6729, the low print of Mar 15. Bulls look for a rebound towards Apr 5 high of $0.7034.
• The RBNZ will announce its policy decision on Wednesday (our usual preview is forthcoming) and the main question is whether the OCR will be raised by 25bp or 50bp. While most economists expect a more measured step, the OIS strip prices a ~72% chance of a double-barrel hike after Monday saw the addition of hawkish bets.
• NZIER's Quarterly Survey of Business Opinions (QSBO) showed that the spread of Omicron "reduced activity and business confidence in the March quarter," with the retails sector most downbeat. Furthermore, intense inflationary pressures are weighing on profitability. Note that the RBNZ uses the QSBO to support its economic forecasting.